Correlation Between PayPal Holdings and Argo Gold
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Argo Gold 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 Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Argo Gold, you can compare the effects of market volatilities on PayPal Holdings and Argo Gold 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 Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Argo Gold.
Diversification Opportunities for PayPal Holdings and Argo Gold
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Argo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold 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 Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Argo Gold go up and down completely randomly.
Pair Corralation between PayPal Holdings and Argo Gold
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.38 times more return on investment than Argo Gold. However, PayPal Holdings is 2.64 times less risky than Argo Gold. It trades about 0.03 of its potential returns per unit of risk. Argo Gold is currently generating about 0.0 per unit of risk. If you would invest 7,362 in PayPal Holdings on August 26, 2024 and sell it today you would earn a total of 1,315 from holding PayPal Holdings or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Argo Gold
Performance |
| Timeline |
| PayPal Holdings |
| Argo Gold |
PayPal Holdings and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Argo Gold
The main advantage of trading using opposite PayPal Holdings and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Argo Gold 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 Argo Gold will offset losses from the drop in Argo Gold's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Morningstar Unconstrained Allocation | PayPal Holdings vs. Sitka Gold Corp | PayPal Holdings vs. MSCI ACWI exAUCONSUMER |
| Argo Gold vs. Aurion Resources | Argo Gold vs. Liberty Gold Corp | Argo Gold vs. Rio2 Limited | Argo Gold vs. Orezone Gold Corp |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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