Correlation Between PayPal Holdings and Kwesst Micro
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Kwesst Micro 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 PayPal Holdings and Kwesst Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings CDR and Kwesst Micro Systems, you can compare the effects of market volatilities on PayPal Holdings and Kwesst Micro 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 Kwesst Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Kwesst Micro.
Diversification Opportunities for PayPal Holdings and Kwesst Micro
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and Kwesst is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Kwesst Micro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwesst Micro Systems 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 Kwesst Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwesst Micro Systems has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Kwesst Micro go up and down completely randomly.
Pair Corralation between PayPal Holdings and Kwesst Micro
Assuming the 90 days trading horizon PayPal Holdings is expected to generate 1.56 times less return on investment than Kwesst Micro. But when comparing it to its historical volatility, PayPal Holdings CDR is 4.52 times less risky than Kwesst Micro. It trades about 0.15 of its potential returns per unit of risk. Kwesst Micro Systems is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 90.00 in Kwesst Micro Systems on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Kwesst Micro Systems or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings CDR vs. Kwesst Micro Systems
Performance |
| Timeline |
| PayPal Holdings CDR |
| Kwesst Micro Systems |
PayPal Holdings and Kwesst Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Kwesst Micro
The main advantage of trading using opposite PayPal Holdings and Kwesst Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Kwesst Micro 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 Kwesst Micro will offset losses from the drop in Kwesst Micro's long position.| PayPal Holdings vs. Leveljump Healthcare Corp | PayPal Holdings vs. CVS HEALTH CDR | PayPal Holdings vs. Jamieson Wellness | PayPal Holdings vs. Nano One Materials |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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