Correlation Between PayPal Holdings and EXELON

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Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and EXELON 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 EXELON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and EXELON GENERATION LLC, you can compare the effects of market volatilities on PayPal Holdings and EXELON 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 EXELON. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and EXELON.

Diversification Opportunities for PayPal Holdings and EXELON

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between PayPal and EXELON is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and EXELON GENERATION LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXELON GENERATION LLC 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 EXELON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXELON GENERATION LLC has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and EXELON go up and down completely randomly.

Pair Corralation between PayPal Holdings and EXELON

Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.0 times more return on investment than EXELON. However, PayPal Holdings is 2.0 times more volatile than EXELON GENERATION LLC. It trades about 0.0 of its potential returns per unit of risk. EXELON GENERATION LLC is currently generating about 0.0 per unit of risk. If you would invest  7,391  in PayPal Holdings on December 4, 2024 and sell it today you would lose (643.00) from holding PayPal Holdings or give up 8.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy91.09%
ValuesDaily Returns

PayPal Holdings  vs.  EXELON GENERATION LLC

 Performance 
       Timeline  
PayPal Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PayPal Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
EXELON GENERATION LLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days EXELON GENERATION LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXELON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

PayPal Holdings and EXELON Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PayPal Holdings and EXELON

The main advantage of trading using opposite PayPal Holdings and EXELON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, EXELON 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 EXELON will offset losses from the drop in EXELON's long position.
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The idea behind PayPal Holdings and EXELON GENERATION LLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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