Correlation Between PayPal Holdings and Calbee
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Calbee 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 Calbee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Calbee Inc, you can compare the effects of market volatilities on PayPal Holdings and Calbee 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 Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Calbee.
Diversification Opportunities for PayPal Holdings and Calbee
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and Calbee is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc 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 Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Calbee go up and down completely randomly.
Pair Corralation between PayPal Holdings and Calbee
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.44 times more return on investment than Calbee. However, PayPal Holdings is 2.28 times less risky than Calbee. It trades about 0.09 of its potential returns per unit of risk. Calbee Inc is currently generating about -0.23 per unit of risk. If you would invest 8,359 in PayPal Holdings on August 29, 2024 and sell it today you would earn a total of 298.00 from holding PayPal Holdings or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Calbee Inc
Performance |
| Timeline |
| PayPal Holdings |
| Calbee Inc |
PayPal Holdings and Calbee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Calbee
The main advantage of trading using opposite PayPal Holdings and Calbee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Calbee 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 Calbee will offset losses from the drop in Calbee's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Calbee vs. Toyo Suisan Kaisha | Calbee vs. Treehouse Foods | Calbee vs. John B Sanfilippo | Calbee vs. Campbell Soup |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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