Correlation Between PayPal Holdings and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Invesco Municipal 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 Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Invesco Municipal Income, you can compare the effects of market volatilities on PayPal Holdings and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Invesco Municipal.
Diversification Opportunities for PayPal Holdings and Invesco Municipal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Invesco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Invesco Municipal go up and down completely randomly.
Pair Corralation between PayPal Holdings and Invesco Municipal
Given the investment horizon of 90 days PayPal Holdings is expected to generate 6.94 times more return on investment than Invesco Municipal. However, PayPal Holdings is 6.94 times more volatile than Invesco Municipal Income. It trades about 0.07 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.42 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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PayPal Holdings vs. Invesco Municipal Income
Performance |
| Timeline |
| PayPal Holdings |
| Invesco Municipal Income |
PayPal Holdings and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Invesco Municipal
The main advantage of trading using opposite PayPal Holdings and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
| Invesco Municipal vs. Barings Emerging Markets | Invesco Municipal vs. T Rowe Price | Invesco Municipal vs. Kinetics Market Opportunities | Invesco Municipal vs. Rbc Emerging Markets |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |