Correlation Between Protect Pharmaceutical and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Protect Pharmaceutical 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 Protect Pharmaceutical and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protect Pharmaceutical and PayPal Holdings, you can compare the effects of market volatilities on Protect Pharmaceutical 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 Protect Pharmaceutical with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protect Pharmaceutical and PayPal Holdings.
Diversification Opportunities for Protect Pharmaceutical and PayPal Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Protect and PayPal is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Protect Pharmaceutical and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Protect Pharmaceutical 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 Protect Pharmaceutical 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 Protect Pharmaceutical i.e., Protect Pharmaceutical and PayPal Holdings go up and down completely randomly.
Pair Corralation between Protect Pharmaceutical and PayPal Holdings
Given the investment horizon of 90 days Protect Pharmaceutical is expected to under-perform the PayPal Holdings. In addition to that, Protect Pharmaceutical is 5.23 times more volatile than PayPal Holdings. It trades about -0.07 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.27 per unit of volatility. If you would invest 7,930 in PayPal Holdings on September 1, 2024 and sell it today you would earn a total of 747.00 from holding PayPal Holdings or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Protect Pharmaceutical vs. PayPal Holdings
Performance |
| Timeline |
| Protect Pharmaceutical |
| PayPal Holdings |
Protect Pharmaceutical and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protect Pharmaceutical and PayPal Holdings
The main advantage of trading using opposite Protect Pharmaceutical and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protect Pharmaceutical 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.| Protect Pharmaceutical vs. Brainsway | Protect Pharmaceutical vs. Venus Concept | Protect Pharmaceutical vs. Tactile Systems Technology | Protect Pharmaceutical vs. Icecure Medical |
| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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