Correlation Between PayPal Holdings and DigiCom Berhad
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and DigiCom Berhad 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 DigiCom Berhad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and DigiCom Berhad, you can compare the effects of market volatilities on PayPal Holdings and DigiCom Berhad 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 DigiCom Berhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and DigiCom Berhad.
Diversification Opportunities for PayPal Holdings and DigiCom Berhad
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PayPal and DigiCom is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and DigiCom Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiCom Berhad 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 DigiCom Berhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiCom Berhad has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and DigiCom Berhad go up and down completely randomly.
Pair Corralation between PayPal Holdings and DigiCom Berhad
Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.02 times less return on investment than DigiCom Berhad. In addition to that, PayPal Holdings is 4.45 times more volatile than DigiCom Berhad. It trades about 0.03 of its total potential returns per unit of risk. DigiCom Berhad is currently generating about 0.12 per unit of volatility. If you would invest 69.00 in DigiCom Berhad on August 30, 2024 and sell it today you would earn a total of 6.00 from holding DigiCom Berhad or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.29% |
| Values | Daily Returns |
PayPal Holdings vs. DigiCom Berhad
Performance |
| Timeline |
| PayPal Holdings |
| DigiCom Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PayPal Holdings and DigiCom Berhad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and DigiCom Berhad
The main advantage of trading using opposite PayPal Holdings and DigiCom Berhad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, DigiCom Berhad 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 DigiCom Berhad will offset losses from the drop in DigiCom Berhad's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| DigiCom Berhad vs. Air Products and | DigiCom Berhad vs. WPP PLC ADR | DigiCom Berhad vs. Luxfer Holdings PLC | DigiCom Berhad vs. Magnite |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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