Correlation Between PayPal Holdings and PolyPeptide Group
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and PolyPeptide Group 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 PolyPeptide Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and PolyPeptide Group AG, you can compare the effects of market volatilities on PayPal Holdings and PolyPeptide Group 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 PolyPeptide Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and PolyPeptide Group.
Diversification Opportunities for PayPal Holdings and PolyPeptide Group
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and PolyPeptide is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and PolyPeptide Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPeptide Group 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 PolyPeptide Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPeptide Group has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and PolyPeptide Group go up and down completely randomly.
Pair Corralation between PayPal Holdings and PolyPeptide Group
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.6 times more return on investment than PolyPeptide Group. However, PayPal Holdings is 1.67 times less risky than PolyPeptide Group. It trades about 0.33 of its potential returns per unit of risk. PolyPeptide Group AG is currently generating about -0.24 per unit of risk. If you would invest 7,813 in PayPal Holdings on September 4, 2024 and sell it today you would earn a total of 840.00 from holding PayPal Holdings or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PayPal Holdings vs. PolyPeptide Group AG
Performance |
| Timeline |
| PayPal Holdings |
| PolyPeptide Group |
PayPal Holdings and PolyPeptide Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and PolyPeptide Group
The main advantage of trading using opposite PayPal Holdings and PolyPeptide Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, PolyPeptide Group 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 PolyPeptide Group will offset losses from the drop in PolyPeptide Group's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Visa Class A |
| PolyPeptide Group vs. Bachem Holding AG | PolyPeptide Group vs. Siegfried Holding | PolyPeptide Group vs. VAT Group AG | PolyPeptide Group vs. Comet Holding AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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