Correlation Between Healthpeak Properties and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Healthpeak Properties 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 Healthpeak Properties and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthpeak Properties and PayPal Holdings, you can compare the effects of market volatilities on Healthpeak Properties 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 Healthpeak Properties with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthpeak Properties and PayPal Holdings.
Diversification Opportunities for Healthpeak Properties and PayPal Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Healthpeak and PayPal is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Healthpeak Properties 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 Healthpeak Properties 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 Healthpeak Properties i.e., Healthpeak Properties and PayPal Holdings go up and down completely randomly.
Pair Corralation between Healthpeak Properties and PayPal Holdings
Assuming the 90 days trading horizon Healthpeak Properties is expected to generate 1.61 times more return on investment than PayPal Holdings. However, Healthpeak Properties is 1.61 times more volatile than PayPal Holdings. It trades about 0.03 of its potential returns per unit of risk. PayPal Holdings is currently generating about 0.04 per unit of risk. If you would invest 12,188 in Healthpeak Properties on September 3, 2024 and sell it today you would earn a total of 1,124 from holding Healthpeak Properties or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Healthpeak Properties vs. PayPal Holdings
Performance |
| Timeline |
| Healthpeak Properties |
| PayPal Holdings |
Healthpeak Properties and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthpeak Properties and PayPal Holdings
The main advantage of trading using opposite Healthpeak Properties and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthpeak Properties 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.| Healthpeak Properties vs. Autohome | Healthpeak Properties vs. Telecomunicaes Brasileiras SA | Healthpeak Properties vs. Zoom Video Communications | Healthpeak Properties vs. Charter Communications |
| PayPal Holdings vs. American Airlines Group | PayPal Holdings vs. Paycom Software | PayPal Holdings vs. Unity Software | PayPal Holdings vs. United Airlines 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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