Correlation Between Samsung Electronics and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and PayPal Holdings 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 Samsung Electronics and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and PayPal Holdings, you can compare the effects of market volatilities on Samsung Electronics and PayPal Holdings 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 Samsung Electronics with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and PayPal Holdings.
Diversification Opportunities for Samsung Electronics and PayPal Holdings
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and PayPal is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and PayPal Holdings go up and down completely randomly.
Pair Corralation between Samsung Electronics and PayPal Holdings
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the PayPal Holdings. In addition to that, Samsung Electronics is 1.28 times more volatile than PayPal Holdings. It trades about -0.19 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.2 per unit of volatility. If you would invest 6,506 in PayPal Holdings on September 2, 2024 and sell it today you would earn a total of 1,698 from holding PayPal Holdings or generate 26.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. PayPal Holdings
Performance |
| Timeline |
| Samsung Electronics |
| PayPal Holdings |
Samsung Electronics and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and PayPal Holdings
The main advantage of trading using opposite Samsung Electronics and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, PayPal Holdings 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| Samsung Electronics vs. SLR Investment Corp | Samsung Electronics vs. APPLIED MATERIALS | Samsung Electronics vs. Mitsubishi Materials | Samsung Electronics vs. REGAL ASIAN INVESTMENTS |
| PayPal Holdings vs. Commonwealth Bank of | PayPal Holdings vs. Iridium Communications | PayPal Holdings vs. REVO INSURANCE SPA | PayPal Holdings vs. National Bank 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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