Correlation Between PayPal Holdings and BigBearai Holdings
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and BigBearai Holdings 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 BigBearai Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and BigBearai Holdings, you can compare the effects of market volatilities on PayPal Holdings and BigBearai Holdings 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 BigBearai Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and BigBearai Holdings.
Diversification Opportunities for PayPal Holdings and BigBearai Holdings
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PayPal and BigBearai is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings 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 BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and BigBearai Holdings go up and down completely randomly.
Pair Corralation between PayPal Holdings and BigBearai Holdings
Given the investment horizon of 90 days PayPal Holdings is expected to generate 12.7 times less return on investment than BigBearai Holdings. But when comparing it to its historical volatility, PayPal Holdings is 6.76 times less risky than BigBearai Holdings. It trades about 0.15 of its potential returns per unit of risk. BigBearai Holdings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 182.00 in BigBearai Holdings on September 13, 2024 and sell it today you would earn a total of 116.00 from holding BigBearai Holdings or generate 63.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PayPal Holdings vs. BigBearai Holdings
Performance |
| Timeline |
| PayPal Holdings |
| BigBearai Holdings |
PayPal Holdings and BigBearai Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and BigBearai Holdings
The main advantage of trading using opposite PayPal Holdings and BigBearai Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, BigBearai Holdings 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 BigBearai Holdings will offset losses from the drop in BigBearai Holdings' long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. American Express |
| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |