Correlation Between PayPal Holdings and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Amcor Plc 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 Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Amcor plc, you can compare the effects of market volatilities on PayPal Holdings and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Amcor Plc.
Diversification Opportunities for PayPal Holdings and Amcor Plc
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PayPal and Amcor is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Amcor Plc go up and down completely randomly.
Pair Corralation between PayPal Holdings and Amcor Plc
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.8 times more return on investment than Amcor Plc. However, PayPal Holdings is 1.25 times less risky than Amcor Plc. It trades about 0.03 of its potential returns per unit of risk. Amcor plc is currently generating about 0.02 per unit of risk. If you would invest 7,263 in PayPal Holdings on September 4, 2024 and sell it today you would earn a total of 1,390 from holding PayPal Holdings or generate 19.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
PayPal Holdings vs. Amcor plc
Performance |
| Timeline |
| PayPal Holdings |
| Amcor plc |
PayPal Holdings and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Amcor Plc
The main advantage of trading using opposite PayPal Holdings and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Visa Class A |
| Amcor Plc vs. SCANSOURCE | Amcor Plc vs. Sunstone Hotel Investors | Amcor Plc vs. INTERCONT HOTELS | Amcor Plc vs. Renesas Electronics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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