Correlation Between PayPal Holdings and Atico Mining
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Atico Mining 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 Atico Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Atico Mining, you can compare the effects of market volatilities on PayPal Holdings and Atico Mining 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 Atico Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Atico Mining.
Diversification Opportunities for PayPal Holdings and Atico Mining
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Atico is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Atico Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atico Mining 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 Atico Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atico Mining has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Atico Mining go up and down completely randomly.
Pair Corralation between PayPal Holdings and Atico Mining
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.33 times more return on investment than Atico Mining. However, PayPal Holdings is 3.07 times less risky than Atico Mining. It trades about 0.35 of its potential returns per unit of risk. Atico Mining is currently generating about -0.11 per unit of risk. If you would invest 7,813 in PayPal Holdings on September 3, 2024 and sell it today you would earn a total of 864.00 from holding PayPal Holdings or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PayPal Holdings vs. Atico Mining
Performance |
| Timeline |
| PayPal Holdings |
| Atico Mining |
PayPal Holdings and Atico Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Atico Mining
The main advantage of trading using opposite PayPal Holdings and Atico Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Atico Mining 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 Atico Mining will offset losses from the drop in Atico Mining's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
| Atico Mining vs. Algoma Steel Group | Atico Mining vs. Champion Iron | Atico Mining vs. International Zeolite Corp | Atico Mining vs. European Residential Real |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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