Correlation Between Strategic Investments and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and PayPal Holdings 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 Strategic Investments and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and PayPal Holdings, you can compare the effects of market volatilities on Strategic Investments and PayPal Holdings 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 Strategic Investments with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and PayPal Holdings.
Diversification Opportunities for Strategic Investments and PayPal Holdings
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Strategic and PayPal is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of Strategic Investments i.e., Strategic Investments and PayPal Holdings go up and down completely randomly.
Pair Corralation between Strategic Investments and PayPal Holdings
Assuming the 90 days horizon Strategic Investments AS is expected to under-perform the PayPal Holdings. In addition to that, Strategic Investments is 2.07 times more volatile than PayPal Holdings. It trades about -0.31 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.36 per unit of volatility. If you would invest 7,902 in PayPal Holdings on September 20, 2024 and sell it today you would earn a total of 668.00 from holding PayPal Holdings or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. PayPal Holdings
Performance |
| Timeline |
| Strategic Investments |
| PayPal Holdings |
Strategic Investments and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and PayPal Holdings
The main advantage of trading using opposite Strategic Investments and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, PayPal Holdings 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
| PayPal Holdings vs. ECHO INVESTMENT ZY | PayPal Holdings vs. Japan Asia Investment | PayPal Holdings vs. Gladstone Investment | PayPal Holdings vs. Strategic Investments AS |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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