Correlation Between PayPal Holdings and Teck Resources
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Teck Resources 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 Teck Resources 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 Teck Resources Limited, you can compare the effects of market volatilities on PayPal Holdings and Teck Resources 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 Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Teck Resources.
Diversification Opportunities for PayPal Holdings and Teck Resources
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Teck is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources 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 Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Teck Resources go up and down completely randomly.
Pair Corralation between PayPal Holdings and Teck Resources
Assuming the 90 days trading horizon PayPal Holdings CDR is expected to generate 1.39 times more return on investment than Teck Resources. However, PayPal Holdings is 1.39 times more volatile than Teck Resources Limited. It trades about 0.06 of its potential returns per unit of risk. Teck Resources Limited is currently generating about 0.03 per unit of risk. If you would invest 641.00 in PayPal Holdings CDR on November 3, 2024 and sell it today you would earn a total of 15.00 from holding PayPal Holdings CDR or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings CDR vs. Teck Resources Limited
Performance |
| Timeline |
| PayPal Holdings CDR |
| Teck Resources |
PayPal Holdings and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Teck Resources
The main advantage of trading using opposite PayPal Holdings and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| PayPal Holdings vs. Westshore Terminals Investment | PayPal Holdings vs. NeXGold Mining Corp | PayPal Holdings vs. Solid Impact Investments | PayPal Holdings vs. Canaf Investments |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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