Correlation Between PayPal Holdings and CanaQuest Medical
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and CanaQuest Medical 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 CanaQuest Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and CanaQuest Medical Corp, you can compare the effects of market volatilities on PayPal Holdings and CanaQuest Medical 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 CanaQuest Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and CanaQuest Medical.
Diversification Opportunities for PayPal Holdings and CanaQuest Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and CanaQuest is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and CanaQuest Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanaQuest Medical 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 are associated (or correlated) with CanaQuest Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanaQuest Medical Corp has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and CanaQuest Medical go up and down completely randomly.
Pair Corralation between PayPal Holdings and CanaQuest Medical
Given the investment horizon of 90 days PayPal Holdings is expected to generate 17.1 times less return on investment than CanaQuest Medical. But when comparing it to its historical volatility, PayPal Holdings is 8.86 times less risky than CanaQuest Medical. It trades about 0.03 of its potential returns per unit of risk. CanaQuest Medical Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in CanaQuest Medical Corp on August 30, 2024 and sell it today you would lose (14.00) from holding CanaQuest Medical Corp or give up 82.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. CanaQuest Medical Corp
Performance |
| Timeline |
| PayPal Holdings |
| CanaQuest Medical Corp |
PayPal Holdings and CanaQuest Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and CanaQuest Medical
The main advantage of trading using opposite PayPal Holdings and CanaQuest Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, CanaQuest Medical 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 CanaQuest Medical will offset losses from the drop in CanaQuest Medical's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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