Correlation Between PayPal Holdings and Telus Corp
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Telus Corp 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 Telus Corp 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 Telus Corp, you can compare the effects of market volatilities on PayPal Holdings and Telus Corp 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 Telus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Telus Corp.
Diversification Opportunities for PayPal Holdings and Telus Corp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Telus is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Telus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telus Corp 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 Telus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telus Corp has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Telus Corp go up and down completely randomly.
Pair Corralation between PayPal Holdings and Telus Corp
Assuming the 90 days trading horizon PayPal Holdings CDR is expected to generate 2.05 times more return on investment than Telus Corp. However, PayPal Holdings is 2.05 times more volatile than Telus Corp. It trades about 0.04 of its potential returns per unit of risk. Telus Corp is currently generating about -0.01 per unit of risk. If you would invest 491.00 in PayPal Holdings CDR on August 31, 2024 and sell it today you would earn a total of 154.00 from holding PayPal Holdings CDR or generate 31.36% 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. Telus Corp
Performance |
| Timeline |
| PayPal Holdings CDR |
| Telus Corp |
PayPal Holdings and Telus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Telus Corp
The main advantage of trading using opposite PayPal Holdings and Telus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Telus Corp 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 Telus Corp will offset losses from the drop in Telus Corp's long position.| PayPal Holdings vs. Constellation Software | PayPal Holdings vs. Highwood Asset Management | PayPal Holdings vs. Rogers Communications | PayPal Holdings vs. Questor Technology |
| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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