Correlation Between PagSeguro Digital and Gen Digital
Can any of the company-specific risk be diversified away by investing in both PagSeguro Digital and Gen 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 PagSeguro Digital and Gen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PagSeguro Digital and Gen Digital, you can compare the effects of market volatilities on PagSeguro Digital and Gen 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 PagSeguro Digital with a short position of Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PagSeguro Digital and Gen Digital.
Diversification Opportunities for PagSeguro Digital and Gen Digital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PagSeguro and Gen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PagSeguro Digital and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital and PagSeguro 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 PagSeguro Digital are associated (or correlated) with Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of PagSeguro Digital i.e., PagSeguro Digital and Gen Digital go up and down completely randomly.
Pair Corralation between PagSeguro Digital and Gen Digital
Assuming the 90 days trading horizon PagSeguro Digital is expected to generate 2.52 times more return on investment than Gen Digital. However, PagSeguro Digital is 2.52 times more volatile than Gen Digital. It trades about 0.24 of its potential returns per unit of risk. Gen Digital is currently generating about -0.21 per unit of risk. If you would invest 774.00 in PagSeguro Digital on November 3, 2024 and sell it today you would earn a total of 114.00 from holding PagSeguro Digital or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PagSeguro Digital vs. Gen Digital
Performance |
| Timeline |
| PagSeguro Digital |
| Gen Digital |
PagSeguro Digital and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PagSeguro Digital and Gen Digital
The main advantage of trading using opposite PagSeguro Digital and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PagSeguro Digital position performs unexpectedly, Gen 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| PagSeguro Digital vs. Fresenius Medical Care | PagSeguro Digital vs. G2D Investments | PagSeguro Digital vs. Applied Materials, | PagSeguro Digital vs. Apartment Investment and |
| Gen Digital vs. United Rentals | Gen Digital vs. Monster Beverage | Gen Digital vs. Ryanair Holdings plc | Gen Digital vs. Live Nation Entertainment, |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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