Correlation Between CHRISTUS and PayPal Holdings

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Can any of the company-specific risk be diversified away by investing in both CHRISTUS 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 CHRISTUS and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHRISTUS HEALTH 4341 and PayPal Holdings, you can compare the effects of market volatilities on CHRISTUS 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 CHRISTUS with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRISTUS and PayPal Holdings.

Diversification Opportunities for CHRISTUS and PayPal Holdings

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between CHRISTUS and PayPal is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CHRISTUS HEALTH 4341 and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and CHRISTUS 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 CHRISTUS HEALTH 4341 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 CHRISTUS i.e., CHRISTUS and PayPal Holdings go up and down completely randomly.

Pair Corralation between CHRISTUS and PayPal Holdings

Assuming the 90 days trading horizon CHRISTUS is expected to generate 6.9 times less return on investment than PayPal Holdings. But when comparing it to its historical volatility, CHRISTUS HEALTH 4341 is 2.44 times less risky than PayPal Holdings. It trades about 0.09 of its potential returns per unit of risk. PayPal Holdings is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  7,930  in PayPal Holdings on September 1, 2024 and sell it today you would earn a total of  747.00  from holding PayPal Holdings or generate 9.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy76.19%
ValuesDaily Returns

CHRISTUS HEALTH 4341  vs.  PayPal Holdings

 Performance 
       Timeline  
CHRISTUS HEALTH 4341 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CHRISTUS HEALTH 4341 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CHRISTUS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
PayPal Holdings 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, PayPal Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

CHRISTUS and PayPal Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CHRISTUS and PayPal Holdings

The main advantage of trading using opposite CHRISTUS and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRISTUS 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.
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The idea behind CHRISTUS HEALTH 4341 and PayPal Holdings 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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