Correlation Between PayPal Holdings and AMGEN
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By analyzing existing cross correlation between PayPal Holdings and AMGEN INC, you can compare the effects of market volatilities on PayPal Holdings and AMGEN 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 AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and AMGEN.
Diversification Opportunities for PayPal Holdings and AMGEN
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and AMGEN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and AMGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC 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 AMGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMGEN INC has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and AMGEN go up and down completely randomly.
Pair Corralation between PayPal Holdings and AMGEN
Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.3 times more return on investment than AMGEN. However, PayPal Holdings is 2.3 times more volatile than AMGEN INC. It trades about 0.13 of its potential returns per unit of risk. AMGEN INC is currently generating about 0.0 per unit of risk. If you would invest 6,346 in PayPal Holdings on September 1, 2024 and sell it today you would earn a total of 2,331 from holding PayPal Holdings or generate 36.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.16% |
| Values | Daily Returns |
PayPal Holdings vs. AMGEN INC
Performance |
| Timeline |
| PayPal Holdings |
| AMGEN INC |
PayPal Holdings and AMGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and AMGEN
The main advantage of trading using opposite PayPal Holdings and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, AMGEN 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 AMGEN will offset losses from the drop in AMGEN's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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