Correlation Between Brookfield Investments and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Brookfield Investments and PayPal Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Brookfield Investments and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Investments and PayPal Holdings CDR, you can compare the effects of market volatilities on Brookfield Investments and PayPal Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Brookfield Investments with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Investments and PayPal Holdings.
Diversification Opportunities for Brookfield Investments and PayPal Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brookfield and PayPal is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Investments and PayPal Holdings CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings CDR and Brookfield Investments is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Brookfield Investments are associated (or correlated) with PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings CDR has no effect on the direction of Brookfield Investments i.e., Brookfield Investments and PayPal Holdings go up and down completely randomly.
Pair Corralation between Brookfield Investments and PayPal Holdings
Assuming the 90 days trading horizon Brookfield Investments is expected to generate 269.13 times less return on investment than PayPal Holdings. But when comparing it to its historical volatility, Brookfield Investments is 2.91 times less risky than PayPal Holdings. It trades about 0.0 of its potential returns per unit of risk. PayPal Holdings CDR is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 592.00 in PayPal Holdings CDR on September 1, 2024 and sell it today you would earn a total of 53.00 from holding PayPal Holdings CDR or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
Brookfield Investments vs. PayPal Holdings CDR
Performance |
| Timeline |
| Brookfield Investments |
| PayPal Holdings CDR |
Brookfield Investments and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Investments and PayPal Holdings
The main advantage of trading using opposite Brookfield Investments and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Investments position performs unexpectedly, PayPal Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| Brookfield Investments vs. Apple Inc CDR | Brookfield Investments vs. NVIDIA CDR | Brookfield Investments vs. Microsoft Corp CDR | Brookfield Investments vs. Amazon CDR |
| PayPal Holdings vs. Royal Bank of | PayPal Holdings vs. Royal Bank of | PayPal Holdings vs. Royal Bank of | PayPal Holdings vs. Toronto Dominion Bank Pref |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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