Correlation Between PayPal Holdings and Questor Technology
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Questor Technology 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 Questor Technology 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 Questor Technology, you can compare the effects of market volatilities on PayPal Holdings and Questor Technology 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 Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Questor Technology.
Diversification Opportunities for PayPal Holdings and Questor Technology
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and Questor is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology 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 Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Questor Technology go up and down completely randomly.
Pair Corralation between PayPal Holdings and Questor Technology
Assuming the 90 days trading horizon PayPal Holdings CDR is expected to generate 0.41 times more return on investment than Questor Technology. However, PayPal Holdings CDR is 2.46 times less risky than Questor Technology. It trades about 0.1 of its potential returns per unit of risk. Questor Technology is currently generating about -0.08 per unit of risk. If you would invest 493.00 in PayPal Holdings CDR on September 3, 2024 and sell it today you would earn a total of 152.00 from holding PayPal Holdings CDR or generate 30.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings CDR vs. Questor Technology
Performance |
| Timeline |
| PayPal Holdings CDR |
| Questor Technology |
PayPal Holdings and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Questor Technology
The main advantage of trading using opposite PayPal Holdings and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Questor Technology 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| PayPal Holdings vs. Questor Technology | PayPal Holdings vs. Caribbean Utilities | PayPal Holdings vs. Brookfield Office Properties | PayPal Holdings vs. High Liner Foods |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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