Correlation Between PayPal Holdings and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Silvercorp Metals 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 Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Silvercorp Metals, you can compare the effects of market volatilities on PayPal Holdings and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Silvercorp Metals.
Diversification Opportunities for PayPal Holdings and Silvercorp Metals
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and Silvercorp is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Silvercorp Metals go up and down completely randomly.
Pair Corralation between PayPal Holdings and Silvercorp Metals
Assuming the 90 days trading horizon PayPal Holdings is expected to generate 0.45 times more return on investment than Silvercorp Metals. However, PayPal Holdings is 2.24 times less risky than Silvercorp Metals. It trades about 0.17 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.25 per unit of risk. If you would invest 7,476 in PayPal Holdings on September 22, 2024 and sell it today you would earn a total of 940.00 from holding PayPal Holdings or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
PayPal Holdings vs. Silvercorp Metals
Performance |
| Timeline |
| PayPal Holdings |
| Silvercorp Metals |
PayPal Holdings and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Silvercorp Metals
The main advantage of trading using opposite PayPal Holdings and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| PayPal Holdings vs. Apple Inc | PayPal Holdings vs. Apple Inc | PayPal Holdings vs. Apple Inc | PayPal Holdings vs. Apple Inc |
| Silvercorp Metals vs. Ares Management Corp | Silvercorp Metals vs. ALTAIR RES INC | Silvercorp Metals vs. Brockhaus Capital Management | Silvercorp Metals vs. Air New Zealand |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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