Correlation Between PayPal Holdings and Whiting Petroleum
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Whiting Petroleum 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 Whiting Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Whiting Petroleum, you can compare the effects of market volatilities on PayPal Holdings and Whiting Petroleum 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 Whiting Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Whiting Petroleum.
Diversification Opportunities for PayPal Holdings and Whiting Petroleum
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PayPal and Whiting is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting Petroleum 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 Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Whiting Petroleum go up and down completely randomly.
Pair Corralation between PayPal Holdings and Whiting Petroleum
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Whiting Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, PayPal Holdings is 4.99 times less risky than Whiting Petroleum. The stock trades about -0.25 of its potential returns per unit of risk. The Whiting Petroleum is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Whiting Petroleum on November 29, 2024 and sell it today you would lose (25.00) from holding Whiting Petroleum or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PayPal Holdings vs. Whiting Petroleum
Performance |
| Timeline |
| PayPal Holdings |
| Whiting Petroleum |
PayPal Holdings and Whiting Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Whiting Petroleum
The main advantage of trading using opposite PayPal Holdings and Whiting Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Whiting Petroleum 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 Whiting Petroleum will offset losses from the drop in Whiting Petroleum's long position.| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
| Whiting Petroleum vs. Chord Energy Corp | Whiting Petroleum vs. Bristow Group | Whiting Petroleum vs. Pioneer Bancorp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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