Correlation Between PayPal Holdings and Ascelia Pharma
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Ascelia Pharma 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 Ascelia Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Ascelia Pharma AB, you can compare the effects of market volatilities on PayPal Holdings and Ascelia Pharma 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 Ascelia Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Ascelia Pharma.
Diversification Opportunities for PayPal Holdings and Ascelia Pharma
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PayPal and Ascelia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB 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 Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Ascelia Pharma go up and down completely randomly.
Pair Corralation between PayPal Holdings and Ascelia Pharma
Given the investment horizon of 90 days PayPal Holdings is expected to generate 3.55 times less return on investment than Ascelia Pharma. But when comparing it to its historical volatility, PayPal Holdings is 3.07 times less risky than Ascelia Pharma. It trades about 0.27 of its potential returns per unit of risk. Ascelia Pharma AB is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 211.00 in Ascelia Pharma AB on September 4, 2024 and sell it today you would earn a total of 75.00 from holding Ascelia Pharma AB or generate 35.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PayPal Holdings vs. Ascelia Pharma AB
Performance |
| Timeline |
| PayPal Holdings |
| Ascelia Pharma AB |
PayPal Holdings and Ascelia Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Ascelia Pharma
The main advantage of trading using opposite PayPal Holdings and Ascelia Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Ascelia Pharma 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 Ascelia Pharma will offset losses from the drop in Ascelia Pharma'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 |
| Ascelia Pharma vs. Hansa Biopharma AB | Ascelia Pharma vs. Cantargia AB | Ascelia Pharma vs. Saniona AB | Ascelia Pharma vs. BioArctic AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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