Correlation Between Papaya Growth and Coty
Can any of the company-specific risk be diversified away by investing in both Papaya Growth and Coty 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 Papaya Growth and Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Papaya Growth Opportunity and Coty Inc, you can compare the effects of market volatilities on Papaya Growth and Coty 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 Papaya Growth with a short position of Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papaya Growth and Coty.
Diversification Opportunities for Papaya Growth and Coty
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Papaya and Coty is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Papaya Growth Opportunity and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and Papaya Growth 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 Papaya Growth Opportunity are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Papaya Growth i.e., Papaya Growth and Coty go up and down completely randomly.
Pair Corralation between Papaya Growth and Coty
Assuming the 90 days horizon Papaya Growth Opportunity is expected to generate 0.89 times more return on investment than Coty. However, Papaya Growth Opportunity is 1.13 times less risky than Coty. It trades about 0.02 of its potential returns per unit of risk. Coty Inc is currently generating about -0.1 per unit of risk. If you would invest 1,075 in Papaya Growth Opportunity on August 25, 2024 and sell it today you would earn a total of 44.00 from holding Papaya Growth Opportunity or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Papaya Growth Opportunity vs. Coty Inc
Performance |
| Timeline |
| Papaya Growth Opportunity |
| Coty Inc |
Papaya Growth and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Papaya Growth and Coty
The main advantage of trading using opposite Papaya Growth and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papaya Growth position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Papaya Growth vs. PowerUp Acquisition Corp | Papaya Growth vs. Aurora Innovation | Papaya Growth vs. HUMANA INC | Papaya Growth vs. Aquagold International |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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