Correlation Between PayPal Holdings and Baoviet Securities
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Baoviet Securities 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 Baoviet Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Baoviet Securities, you can compare the effects of market volatilities on PayPal Holdings and Baoviet Securities 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 Baoviet Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Baoviet Securities.
Diversification Opportunities for PayPal Holdings and Baoviet Securities
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between PayPal and Baoviet is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Baoviet Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baoviet Securities 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 Baoviet Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baoviet Securities has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Baoviet Securities go up and down completely randomly.
Pair Corralation between PayPal Holdings and Baoviet Securities
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.74 times more return on investment than Baoviet Securities. However, PayPal Holdings is 1.35 times less risky than Baoviet Securities. It trades about 0.13 of its potential returns per unit of risk. Baoviet Securities is currently generating about -0.04 per unit of risk. If you would invest 6,353 in PayPal Holdings on September 3, 2024 and sell it today you would earn a total of 2,324 from holding PayPal Holdings or generate 36.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
PayPal Holdings vs. Baoviet Securities
Performance |
| Timeline |
| PayPal Holdings |
| Baoviet Securities |
PayPal Holdings and Baoviet Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Baoviet Securities
The main advantage of trading using opposite PayPal Holdings and Baoviet Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Baoviet Securities 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 Baoviet Securities will offset losses from the drop in Baoviet Securities' long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
| Baoviet Securities vs. Alphanam ME | Baoviet Securities vs. Hochiminh City Metal | Baoviet Securities vs. Atesco Industrial Cartering | Baoviet Securities vs. Danang Education Investment |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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