Correlation Between PayPal Holdings and Helio
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Helio 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 Helio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Helio, you can compare the effects of market volatilities on PayPal Holdings and Helio 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 Helio. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Helio.
Diversification Opportunities for PayPal Holdings and Helio
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and Helio is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Helio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helio 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 Helio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helio has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Helio go up and down completely randomly.
Pair Corralation between PayPal Holdings and Helio
Given the investment horizon of 90 days PayPal Holdings is expected to generate 15.27 times less return on investment than Helio. But when comparing it to its historical volatility, PayPal Holdings is 7.08 times less risky than Helio. It trades about 0.04 of its potential returns per unit of risk. Helio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Helio on September 16, 2024 and sell it today you would earn a total of 350.00 from holding Helio or generate 350.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 58.47% |
| Values | Daily Returns |
PayPal Holdings vs. Helio
Performance |
| Timeline |
| PayPal Holdings |
| Helio |
PayPal Holdings and Helio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Helio
The main advantage of trading using opposite PayPal Holdings and Helio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Helio 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 Helio will offset losses from the drop in Helio's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. American Express |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |