Correlation Between PayPal Holdings and Gordon Auto
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Gordon Auto 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 Gordon Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Gordon Auto Body, you can compare the effects of market volatilities on PayPal Holdings and Gordon Auto 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 Gordon Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Gordon Auto.
Diversification Opportunities for PayPal Holdings and Gordon Auto
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PayPal and Gordon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Gordon Auto Body in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gordon Auto Body 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 are associated (or correlated) with Gordon Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gordon Auto Body has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Gordon Auto go up and down completely randomly.
Pair Corralation between PayPal Holdings and Gordon Auto
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.87 times more return on investment than Gordon Auto. However, PayPal Holdings is 1.14 times less risky than Gordon Auto. It trades about 0.21 of its potential returns per unit of risk. Gordon Auto Body is currently generating about 0.17 per unit of risk. If you would invest 7,036 in PayPal Holdings on September 12, 2024 and sell it today you would earn a total of 1,840 from holding PayPal Holdings or generate 26.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
PayPal Holdings vs. Gordon Auto Body
Performance |
| Timeline |
| PayPal Holdings |
| Gordon Auto Body |
PayPal Holdings and Gordon Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Gordon Auto
The main advantage of trading using opposite PayPal Holdings and Gordon Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Gordon Auto 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 Gordon Auto will offset losses from the drop in Gordon Auto's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Mastercard |
| Gordon Auto vs. Kaulin Mfg | Gordon Auto vs. Tex Ray Industrial Co | Gordon Auto vs. De Licacy Industrial | Gordon Auto vs. Kwong Fong Industries |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |