Correlation Between PayPal Holdings and IShares Euro
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and IShares Euro 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 IShares Euro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and iShares Euro Dividend, you can compare the effects of market volatilities on PayPal Holdings and IShares Euro 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 IShares Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and IShares Euro.
Diversification Opportunities for PayPal Holdings and IShares Euro
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and IShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and iShares Euro Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Euro Dividend 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 IShares Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Euro Dividend has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and IShares Euro go up and down completely randomly.
Pair Corralation between PayPal Holdings and IShares Euro
Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.81 times more return on investment than IShares Euro. However, PayPal Holdings is 2.81 times more volatile than iShares Euro Dividend. It trades about 0.03 of its potential returns per unit of risk. iShares Euro Dividend is currently generating about 0.03 per unit of risk. If you would invest 6,977 in PayPal Holdings on September 5, 2024 and sell it today you would earn a total of 1,537 from holding PayPal Holdings or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.82% |
| Values | Daily Returns |
PayPal Holdings vs. iShares Euro Dividend
Performance |
| Timeline |
| PayPal Holdings |
| iShares Euro Dividend |
PayPal Holdings and IShares Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and IShares Euro
The main advantage of trading using opposite PayPal Holdings and IShares Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, IShares Euro 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 IShares Euro will offset losses from the drop in IShares Euro's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| IShares Euro vs. iShares III Public | IShares Euro vs. iShares Core MSCI | IShares Euro vs. iShares France Govt | IShares Euro vs. iShares Edge MSCI |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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