Correlation Between Gen Digital and PagSeguro Digital
Can any of the company-specific risk be diversified away by investing in both Gen Digital and PagSeguro Digital 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 Gen Digital and PagSeguro Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gen Digital and PagSeguro Digital, you can compare the effects of market volatilities on Gen Digital and PagSeguro Digital 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 Gen Digital with a short position of PagSeguro Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen Digital and PagSeguro Digital.
Diversification Opportunities for Gen Digital and PagSeguro Digital
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gen and PagSeguro is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and PagSeguro Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PagSeguro Digital and Gen Digital 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 Gen Digital are associated (or correlated) with PagSeguro Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PagSeguro Digital has no effect on the direction of Gen Digital i.e., Gen Digital and PagSeguro Digital go up and down completely randomly.
Pair Corralation between Gen Digital and PagSeguro Digital
Considering the 90-day investment horizon Gen Digital is expected to generate 1.13 times more return on investment than PagSeguro Digital. However, Gen Digital is 1.13 times more volatile than PagSeguro Digital. It trades about 0.22 of its potential returns per unit of risk. PagSeguro Digital is currently generating about -0.22 per unit of risk. If you would invest 2,700 in Gen Digital on August 23, 2024 and sell it today you would earn a total of 281.00 from holding Gen Digital or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gen Digital vs. PagSeguro Digital
Performance |
| Timeline |
| Gen Digital |
| PagSeguro Digital |
Gen Digital and PagSeguro Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gen Digital and PagSeguro Digital
The main advantage of trading using opposite Gen Digital and PagSeguro Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gen Digital position performs unexpectedly, PagSeguro Digital 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 PagSeguro Digital will offset losses from the drop in PagSeguro Digital's long position.| Gen Digital vs. Wex Inc | Gen Digital vs. CSG Systems International | Gen Digital vs. VeriSign | Gen Digital vs. Global Blue Group |
| PagSeguro Digital vs. Marqeta | PagSeguro Digital vs. StoneCo | PagSeguro Digital vs. Confluent | PagSeguro Digital vs. Dlocal |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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