Correlation Between PayPal Holdings and Altegris Futures
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Altegris Futures 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 Altegris Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Altegris Futures Evolution, you can compare the effects of market volatilities on PayPal Holdings and Altegris Futures 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 Altegris Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Altegris Futures.
Diversification Opportunities for PayPal Holdings and Altegris Futures
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and Altegris is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo 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 Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Altegris Futures go up and down completely randomly.
Pair Corralation between PayPal Holdings and Altegris Futures
Given the investment horizon of 90 days PayPal Holdings is expected to generate 3.61 times more return on investment than Altegris Futures. However, PayPal Holdings is 3.61 times more volatile than Altegris Futures Evolution. It trades about 0.11 of its potential returns per unit of risk. Altegris Futures Evolution is currently generating about -0.1 per unit of risk. If you would invest 6,561 in PayPal Holdings on September 3, 2024 and sell it today you would earn a total of 2,116 from holding PayPal Holdings or generate 32.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Altegris Futures Evolution
Performance |
| Timeline |
| PayPal Holdings |
| Altegris Futures Evo |
PayPal Holdings and Altegris Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Altegris Futures
The main advantage of trading using opposite PayPal Holdings and Altegris Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Altegris Futures 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 Altegris Futures will offset losses from the drop in Altegris Futures' long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
| Altegris Futures vs. Aqr Managed Futures | Altegris Futures vs. Pimco Trends Managed | Altegris Futures vs. Pimco Trends Managed | Altegris Futures vs. American Beacon Ahl |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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