Correlation Between PayPal Holdings and Peak Resources
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Peak Resources 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 Peak Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Peak Resources Limited, you can compare the effects of market volatilities on PayPal Holdings and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Peak Resources.
Diversification Opportunities for PayPal Holdings and Peak Resources
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and Peak is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Peak Resources go up and down completely randomly.
Pair Corralation between PayPal Holdings and Peak Resources
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.11 times more return on investment than Peak Resources. However, PayPal Holdings is 8.9 times less risky than Peak Resources. It trades about 0.35 of its potential returns per unit of risk. Peak Resources Limited is currently generating about -0.09 per unit of risk. If you would invest 7,813 in PayPal Holdings on September 3, 2024 and sell it today you would earn a total of 864.00 from holding PayPal Holdings or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
PayPal Holdings vs. Peak Resources Limited
Performance |
| Timeline |
| PayPal Holdings |
| Peak Resources |
PayPal Holdings and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Peak Resources
The main advantage of trading using opposite PayPal Holdings and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
| Peak Resources vs. Peak Minerals Limited | Peak Resources vs. Anheuser Busch InBev SANV | Peak Resources vs. AALBERTS IND | Peak Resources vs. SECURITAS B |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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