Correlation Between PayPal Holdings and LOWES

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and LOWES 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 LOWES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and LOWES INC 31, you can compare the effects of market volatilities on PayPal Holdings and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and LOWES.

Diversification Opportunities for PayPal Holdings and LOWES

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between PayPal and LOWES is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and LOWES INC 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 31 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 31 has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and LOWES go up and down completely randomly.

Pair Corralation between PayPal Holdings and LOWES

Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.65 times more return on investment than LOWES. However, PayPal Holdings is 1.65 times more volatile than LOWES INC 31. It trades about 0.07 of its potential returns per unit of risk. LOWES INC 31 is currently generating about 0.11 per unit of risk. If you would invest  8,694  in PayPal Holdings on September 12, 2024 and sell it today you would earn a total of  182.00  from holding PayPal Holdings or generate 2.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

PayPal Holdings  vs.  LOWES INC 31

 Performance 
       Timeline  
PayPal Holdings 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PayPal Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.
LOWES INC 31 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LOWES INC 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LOWES is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PayPal Holdings and LOWES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PayPal Holdings and LOWES

The main advantage of trading using opposite PayPal Holdings and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.
PayPal Holdings vs. American Express
PayPal Holdings vs. Capital One Financial
PayPal Holdings vs. Upstart Holdings
PayPal Holdings vs. Ally Financial
The idea behind PayPal Holdings and LOWES INC 31 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.
LOWES vs. AEP TEX INC
LOWES vs. US BANK NATIONAL
LOWES vs. Applied Blockchain
LOWES vs. BigBearai Holdings
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Stocks Directory
Find actively traded stocks across global markets


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY