Correlation Between PayPal Holdings and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Fidelity Stock 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 Fidelity Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Fidelity Stock Selector, you can compare the effects of market volatilities on PayPal Holdings and Fidelity Stock 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 Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Fidelity Stock.
Diversification Opportunities for PayPal Holdings and Fidelity Stock
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PayPal and FIDELITY is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector 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 Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Fidelity Stock go up and down completely randomly.
Pair Corralation between PayPal Holdings and Fidelity Stock
Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.05 times less return on investment than Fidelity Stock. In addition to that, PayPal Holdings is 2.93 times more volatile than Fidelity Stock Selector. It trades about 0.03 of its total potential returns per unit of risk. Fidelity Stock Selector is currently generating about 0.09 per unit of volatility. If you would invest 2,244 in Fidelity Stock Selector on September 5, 2024 and sell it today you would earn a total of 857.00 from holding Fidelity Stock Selector or generate 38.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Fidelity Stock Selector
Performance |
| Timeline |
| PayPal Holdings |
| Fidelity Stock Selector |
PayPal Holdings and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Fidelity Stock
The main advantage of trading using opposite PayPal Holdings and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Fidelity Stock 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 Fidelity Stock will offset losses from the drop in Fidelity Stock's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Fidelity Stock vs. Fidelity Freedom 2015 | Fidelity Stock vs. Fidelity Puritan Fund | Fidelity Stock vs. Fidelity Puritan Fund | Fidelity Stock vs. Fidelity Pennsylvania Municipal |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |