Correlation Between PayPal Holdings and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Impala Platinum 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 Impala Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Impala Platinum Holdings, you can compare the effects of market volatilities on PayPal Holdings and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Impala Platinum.
Diversification Opportunities for PayPal Holdings and Impala Platinum
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PayPal and Impala is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Impala Platinum go up and down completely randomly.
Pair Corralation between PayPal Holdings and Impala Platinum
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.56 times more return on investment than Impala Platinum. However, PayPal Holdings is 1.79 times less risky than Impala Platinum. It trades about 0.13 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.25 per unit of risk. If you would invest 8,359 in PayPal Holdings on August 27, 2024 and sell it today you would earn a total of 418.00 from holding PayPal Holdings or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Impala Platinum Holdings
Performance |
| Timeline |
| PayPal Holdings |
| Impala Platinum Holdings |
PayPal Holdings and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Impala Platinum
The main advantage of trading using opposite PayPal Holdings and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Morningstar Unconstrained Allocation | PayPal Holdings vs. Sitka Gold Corp | PayPal Holdings vs. MSCI ACWI exAUCONSUMER |
| Impala Platinum vs. Morningstar Unconstrained Allocation | Impala Platinum vs. High Yield Municipal Fund | Impala Platinum vs. Knife River | Impala Platinum vs. Klckner Co SE |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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