Correlation Between PayPal Holdings and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Jiangsu Expressway 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 Jiangsu Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Jiangsu Expressway, you can compare the effects of market volatilities on PayPal Holdings and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Jiangsu Expressway.
Diversification Opportunities for PayPal Holdings and Jiangsu Expressway
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PayPal and Jiangsu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between PayPal Holdings and Jiangsu Expressway
If you would invest 106.00 in Jiangsu Expressway on December 31, 2024 and sell it today you would earn a total of 0.00 from holding Jiangsu Expressway or generate 0.0% 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. Jiangsu Expressway
Performance |
| Timeline |
| PayPal Holdings |
| Jiangsu Expressway |
PayPal Holdings and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Jiangsu Expressway
The main advantage of trading using opposite PayPal Holdings and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Jiangsu Expressway vs. Texas Roadhouse | Jiangsu Expressway vs. Yum Brands | Jiangsu Expressway vs. BJs Restaurants | Jiangsu Expressway vs. United Natural Foods |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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