Correlation Between PayPal Holdings and Sassy Resources
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Sassy 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 Sassy 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 Sassy Resources, you can compare the effects of market volatilities on PayPal Holdings and Sassy 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 Sassy Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Sassy Resources.
Diversification Opportunities for PayPal Holdings and Sassy Resources
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and Sassy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Sassy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sassy 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 Sassy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sassy Resources has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Sassy Resources go up and down completely randomly.
Pair Corralation between PayPal Holdings and Sassy Resources
Given the investment horizon of 90 days PayPal Holdings is expected to generate 13.39 times less return on investment than Sassy Resources. But when comparing it to its historical volatility, PayPal Holdings is 17.63 times less risky than Sassy Resources. It trades about 0.16 of its potential returns per unit of risk. Sassy Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.46 in Sassy Resources on August 29, 2024 and sell it today you would earn a total of 2.51 from holding Sassy Resources or generate 72.54% 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. Sassy Resources
Performance |
| Timeline |
| PayPal Holdings |
| Sassy Resources |
PayPal Holdings and Sassy Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Sassy Resources
The main advantage of trading using opposite PayPal Holdings and Sassy Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Sassy 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 Sassy Resources will offset losses from the drop in Sassy Resources' long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Sassy Resources vs. Pan Global Resources | Sassy Resources vs. Tower Resources | Sassy Resources vs. Metals X Limited | Sassy Resources vs. Nevada King Gold |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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