Correlation Between PayPal Holdings and Smead Value
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Smead Value 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 Smead Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Smead Value Fund, you can compare the effects of market volatilities on PayPal Holdings and Smead Value 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 Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Smead Value.
Diversification Opportunities for PayPal Holdings and Smead Value
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PayPal and Smead is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund 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 Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Smead Value go up and down completely randomly.
Pair Corralation between PayPal Holdings and Smead Value
Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.29 times more return on investment than Smead Value. However, PayPal Holdings is 2.29 times more volatile than Smead Value Fund. It trades about 0.08 of its potential returns per unit of risk. Smead Value Fund is currently generating about 0.09 per unit of risk. If you would invest 5,894 in PayPal Holdings on September 3, 2024 and sell it today you would earn a total of 2,783 from holding PayPal Holdings or generate 47.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Smead Value Fund
Performance |
| Timeline |
| PayPal Holdings |
| Smead Value Fund |
PayPal Holdings and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Smead Value
The main advantage of trading using opposite PayPal Holdings and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
| Smead Value vs. Dodge Cox Stock | Smead Value vs. American Funds American | Smead Value vs. American Funds American | Smead Value vs. American Mutual Fund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |