Correlation Between PayPal Holdings and China Resources
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and China Resources Cement, you can compare the effects of market volatilities on PayPal Holdings and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and China Resources.
Diversification Opportunities for PayPal Holdings and China Resources
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PayPal and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and China Resources Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Cement 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Cement has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and China Resources go up and down completely randomly.
Pair Corralation between PayPal Holdings and China Resources
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 | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
PayPal Holdings vs. China Resources Cement
Performance |
| Timeline |
| PayPal Holdings |
| China Resources Cement |
PayPal Holdings and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and China Resources
The main advantage of trading using opposite PayPal Holdings and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Visa Class A |
| China Resources vs. Cementos Pacasmayo SAA | China Resources vs. Summit Materials | China Resources vs. Eagle Materials | China Resources vs. CRH PLC ADR |
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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