Correlation Between PayPal Holdings and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Capstone Mining 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 Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings CDR and Capstone Mining Corp, you can compare the effects of market volatilities on PayPal Holdings and Capstone Mining 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 Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Capstone Mining.
Diversification Opportunities for PayPal Holdings and Capstone Mining
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PayPal and Capstone is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining 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 CDR are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Capstone Mining go up and down completely randomly.
Pair Corralation between PayPal Holdings and Capstone Mining
Assuming the 90 days trading horizon PayPal Holdings is expected to generate 2.39 times less return on investment than Capstone Mining. But when comparing it to its historical volatility, PayPal Holdings CDR is 1.36 times less risky than Capstone Mining. It trades about 0.03 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 498.00 in Capstone Mining Corp on September 13, 2024 and sell it today you would earn a total of 462.00 from holding Capstone Mining Corp or generate 92.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings CDR vs. Capstone Mining Corp
Performance |
| Timeline |
| PayPal Holdings CDR |
| Capstone Mining Corp |
PayPal Holdings and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Capstone Mining
The main advantage of trading using opposite PayPal Holdings and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Capstone Mining 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| PayPal Holdings vs. DRI Healthcare Trust | PayPal Holdings vs. Maple Leaf Foods | PayPal Holdings vs. SPoT Coffee | PayPal Holdings vs. UnitedHealth Group CDR |
| Capstone Mining vs. Arizona Sonoran Copper | Capstone Mining vs. Marimaca Copper Corp | Capstone Mining vs. World Copper | Capstone Mining vs. QC Copper and |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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