Correlation Between PayPal Holdings and CaliberCos
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and CaliberCos 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 CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and CaliberCos Class A, you can compare the effects of market volatilities on PayPal Holdings and CaliberCos 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 CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and CaliberCos.
Diversification Opportunities for PayPal Holdings and CaliberCos
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and CaliberCos is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and CaliberCos go up and down completely randomly.
Pair Corralation between PayPal Holdings and CaliberCos
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.29 times more return on investment than CaliberCos. However, PayPal Holdings is 3.42 times less risky than CaliberCos. It trades about 0.22 of its potential returns per unit of risk. CaliberCos Class A is currently generating about -0.02 per unit of risk. If you would invest 7,036 in PayPal Holdings on September 12, 2024 and sell it today you would earn a total of 2,037 from holding PayPal Holdings or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. CaliberCos Class A
Performance |
| Timeline |
| PayPal Holdings |
| CaliberCos Class A |
PayPal Holdings and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and CaliberCos
The main advantage of trading using opposite PayPal Holdings and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| CaliberCos vs. Contagious Gaming | CaliberCos vs. Newpark Resources | CaliberCos vs. Tritent International Agriculture | CaliberCos vs. Tyson Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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