Correlation Between PT Bank and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and PayPal Holdings, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and PayPal Holdings.
Diversification Opportunities for PT Bank and PayPal Holdings
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and PayPal is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and PT Bank 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 PT Bank Rakyat 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 has no effect on the direction of PT Bank i.e., PT Bank and PayPal Holdings go up and down completely randomly.
Pair Corralation between PT Bank and PayPal Holdings
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the PayPal Holdings. In addition to that, PT Bank is 1.26 times more volatile than PayPal Holdings. It trades about -0.14 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.37 per unit of volatility. If you would invest 7,118 in PayPal Holdings on September 2, 2024 and sell it today you would earn a total of 1,086 from holding PayPal Holdings or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. PayPal Holdings
Performance |
| Timeline |
| PT Bank Rakyat |
| PayPal Holdings |
PT Bank and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and PayPal Holdings
The main advantage of trading using opposite PT Bank and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. Fast Retailing Co | PT Bank vs. Casio Computer CoLtd | PT Bank vs. JIAHUA STORES | PT Bank vs. BJs Wholesale Club |
| PayPal Holdings vs. Commonwealth Bank of | PayPal Holdings vs. Iridium Communications | PayPal Holdings vs. REVO INSURANCE SPA | PayPal Holdings vs. National Bank Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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