Correlation Between PayPal Holdings and SAF Holland
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and SAF Holland 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 SAF Holland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and SAF Holland SA, you can compare the effects of market volatilities on PayPal Holdings and SAF Holland 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 SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and SAF Holland.
Diversification Opportunities for PayPal Holdings and SAF Holland
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and SAF is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA 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 SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and SAF Holland go up and down completely randomly.
Pair Corralation between PayPal Holdings and SAF Holland
Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.77 times less return on investment than SAF Holland. In addition to that, PayPal Holdings is 1.09 times more volatile than SAF Holland SA. It trades about 0.03 of its total potential returns per unit of risk. SAF Holland SA is currently generating about 0.06 per unit of volatility. If you would invest 814.00 in SAF Holland SA on September 5, 2024 and sell it today you would earn a total of 498.00 from holding SAF Holland SA or generate 61.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.82% |
| Values | Daily Returns |
PayPal Holdings vs. SAF Holland SA
Performance |
| Timeline |
| PayPal Holdings |
| SAF Holland SA |
PayPal Holdings and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and SAF Holland
The main advantage of trading using opposite PayPal Holdings and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| SAF Holland vs. Science Applications International | SAF Holland vs. INFORMATION SVC GRP | SAF Holland vs. DATANG INTL POW | SAF Holland vs. THORNEY TECHS LTD |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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