Correlation Between PayPal Holdings and Popular Total
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Popular Total 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 Popular Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Popular Total Return, you can compare the effects of market volatilities on PayPal Holdings and Popular Total 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 Popular Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Popular Total.
Diversification Opportunities for PayPal Holdings and Popular Total
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PayPal and Popular is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Popular Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular Total Return 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 Popular Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular Total Return has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Popular Total go up and down completely randomly.
Pair Corralation between PayPal Holdings and Popular Total
Given the investment horizon of 90 days PayPal Holdings is expected to generate 4.55 times more return on investment than Popular Total. However, PayPal Holdings is 4.55 times more volatile than Popular Total Return. It trades about 0.21 of its potential returns per unit of risk. Popular Total Return is currently generating about 0.13 per unit of risk. If you would invest 7,036 in PayPal Holdings on September 12, 2024 and sell it today you would earn a total of 1,840 from holding PayPal Holdings or generate 26.15% 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. Popular Total Return
Performance |
| Timeline |
| PayPal Holdings |
| Popular Total Return |
PayPal Holdings and Popular Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Popular Total
The main advantage of trading using opposite PayPal Holdings and Popular Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Popular Total 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 Popular Total will offset losses from the drop in Popular Total's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Mastercard |
| Popular Total vs. Popular Total Return | Popular Total vs. Popular Income Plus | Popular Total vs. Popular Income Plus | Popular Total vs. FT Vest Equity |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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