Correlation Between PayPal Holdings and Patriot Battery
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Patriot Battery 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 Patriot Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Patriot Battery Metals, you can compare the effects of market volatilities on PayPal Holdings and Patriot Battery 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 Patriot Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Patriot Battery.
Diversification Opportunities for PayPal Holdings and Patriot Battery
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and Patriot is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Patriot Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot Battery Metals 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 Patriot Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot Battery Metals has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Patriot Battery go up and down completely randomly.
Pair Corralation between PayPal Holdings and Patriot Battery
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.58 times more return on investment than Patriot Battery. However, PayPal Holdings is 1.72 times less risky than Patriot Battery. It trades about 0.1 of its potential returns per unit of risk. Patriot Battery Metals is currently generating about -0.56 per unit of risk. If you would invest 8,359 in PayPal Holdings on August 29, 2024 and sell it today you would earn a total of 335.00 from holding PayPal Holdings or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Patriot Battery Metals
Performance |
| Timeline |
| PayPal Holdings |
| Patriot Battery Metals |
PayPal Holdings and Patriot Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Patriot Battery
The main advantage of trading using opposite PayPal Holdings and Patriot Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Patriot Battery 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 Patriot Battery will offset losses from the drop in Patriot Battery's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Patriot Battery vs. Hannan Metals | Patriot Battery vs. Aldebaran Resources | Patriot Battery vs. Leading Edge Materials | Patriot Battery vs. Atco Mining |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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