Correlation Between PayPal Holdings and Enbridge Pref
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By analyzing existing cross correlation between PayPal Holdings CDR and Enbridge Pref 5, you can compare the effects of market volatilities on PayPal Holdings and Enbridge Pref 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 PayPal Holdings with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Enbridge Pref.
Diversification Opportunities for PayPal Holdings and Enbridge Pref
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PayPal and Enbridge is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 and PayPal Holdings 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 PayPal Holdings CDR are associated (or correlated) with Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 5 has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Enbridge Pref go up and down completely randomly.
Pair Corralation between PayPal Holdings and Enbridge Pref
Assuming the 90 days trading horizon PayPal Holdings CDR is expected to generate 5.95 times more return on investment than Enbridge Pref. However, PayPal Holdings is 5.95 times more volatile than Enbridge Pref 5. It trades about 0.13 of its potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.22 per unit of risk. If you would invest 610.00 in PayPal Holdings CDR on August 26, 2024 and sell it today you would earn a total of 35.00 from holding PayPal Holdings CDR or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings CDR vs. Enbridge Pref 5
Performance |
| Timeline |
| PayPal Holdings CDR |
| Enbridge Pref 5 |
PayPal Holdings and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Enbridge Pref
The main advantage of trading using opposite PayPal Holdings and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.| PayPal Holdings vs. Orbit Garant Drilling | PayPal Holdings vs. Pembina Pipeline Corp | PayPal Holdings vs. Stampede Drilling | PayPal Holdings vs. Wishpond Technologies |
| Enbridge Pref vs. Northstar Clean Technologies | Enbridge Pref vs. Bird Construction | Enbridge Pref vs. Sparx Technology | Enbridge Pref vs. Xtract One Technologies |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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