Correlation Between PayPal Holdings and Spectral Med
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Spectral Med 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 Spectral Med 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 Spectral Med, you can compare the effects of market volatilities on PayPal Holdings and Spectral Med 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 Spectral Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Spectral Med.
Diversification Opportunities for PayPal Holdings and Spectral Med
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and Spectral is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Spectral Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectral Med 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 Spectral Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectral Med has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Spectral Med go up and down completely randomly.
Pair Corralation between PayPal Holdings and Spectral Med
Assuming the 90 days trading horizon PayPal Holdings CDR is expected to generate 0.49 times more return on investment than Spectral Med. However, PayPal Holdings CDR is 2.05 times less risky than Spectral Med. It trades about 0.12 of its potential returns per unit of risk. Spectral Med is currently generating about 0.02 per unit of risk. If you would invest 438.00 in PayPal Holdings CDR on September 1, 2024 and sell it today you would earn a total of 207.00 from holding PayPal Holdings CDR or generate 47.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
PayPal Holdings CDR vs. Spectral Med
Performance |
| Timeline |
| PayPal Holdings CDR |
| Spectral Med |
PayPal Holdings and Spectral Med Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Spectral Med
The main advantage of trading using opposite PayPal Holdings and Spectral Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Spectral Med 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 Spectral Med will offset losses from the drop in Spectral Med's long position.| PayPal Holdings vs. Royal Bank of | PayPal Holdings vs. Royal Bank of | PayPal Holdings vs. Royal Bank of | PayPal Holdings vs. Toronto Dominion Bank Pref |
| Spectral Med vs. Helix BioPharma Corp | Spectral Med vs. Aptose Biosciences | Spectral Med vs. Microbix Biosystems | Spectral Med vs. Resverlogix Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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