Correlation Between PayPal Holdings and Varta AG
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By analyzing existing cross correlation between PayPal Holdings and Varta AG, you can compare the effects of market volatilities on PayPal Holdings and Varta AG 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 Varta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Varta AG.
Diversification Opportunities for PayPal Holdings and Varta AG
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PayPal and Varta is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Varta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varta AG 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 Varta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varta AG has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Varta AG go up and down completely randomly.
Pair Corralation between PayPal Holdings and Varta AG
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.27 times more return on investment than Varta AG. However, PayPal Holdings is 3.77 times less risky than Varta AG. It trades about 0.03 of its potential returns per unit of risk. Varta AG is currently generating about -0.02 per unit of risk. If you would invest 6,977 in PayPal Holdings on September 5, 2024 and sell it today you would earn a total of 1,537 from holding PayPal Holdings or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
PayPal Holdings vs. Varta AG
Performance |
| Timeline |
| PayPal Holdings |
| Varta AG |
PayPal Holdings and Varta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Varta AG
The main advantage of trading using opposite PayPal Holdings and Varta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Varta AG 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 Varta AG will offset losses from the drop in Varta AG's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Varta AG vs. METTLER TOLEDO INTL | Varta AG vs. METTLER TOLEDO INTL | Varta AG vs. Mitie Group PLC | Varta AG vs. LODESTAR MIN |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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