Correlation Between PayPal Holdings and American Beacon
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and American Beacon Mid Cap, you can compare the effects of market volatilities on PayPal Holdings and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and American Beacon.
Diversification Opportunities for PayPal Holdings and American Beacon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and American Beacon Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Mid 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Mid has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and American Beacon go up and down completely randomly.
Pair Corralation between PayPal Holdings and American Beacon
If you would invest 7,813 in PayPal Holdings on September 4, 2024 and sell it today you would earn a total of 840.00 from holding PayPal Holdings or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
PayPal Holdings vs. American Beacon Mid Cap
Performance |
| Timeline |
| PayPal Holdings |
| American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PayPal Holdings and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and American Beacon
The main advantage of trading using opposite PayPal Holdings and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Siit Global Managed | American Beacon vs. Qs Global Equity | American Beacon vs. 361 Global Longshort | American Beacon vs. Morningstar Global Income |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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