Correlation Between PayPal Holdings and Thrivent Large

Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Thrivent Large 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 Thrivent Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PayPal Holdings and Thrivent Large Cap, you can compare the effects of market volatilities on PayPal Holdings and Thrivent Large 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 Thrivent Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Thrivent Large.

Diversification Opportunities for PayPal Holdings and Thrivent Large

0.09

Correlation Coefficient

PayPal Holdings  Thrivent Large

Significant diversification

The 3 months correlation between PayPal and Thrivent is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Thrivent Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Large Cap 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 Thrivent Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Large Cap has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Thrivent Large go up and down completely randomly.

Pair Corralation between PayPal Holdings and Thrivent Large

Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Thrivent Large. In addition to that, PayPal Holdings is 3.44 times more volatile than Thrivent Large Cap. It trades about -0.13 of its total potential returns per unit of risk. Thrivent Large Cap is currently generating about 0.06 per unit of volatility. If you would invest  2,853  in Thrivent Large Cap on December 29, 2024 and sell it today you would earn a total of  77.00  from holding Thrivent Large Cap or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PayPal Holdings  vs.  Thrivent Large Cap

PayPal Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PayPal Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Thrivent Large Cap

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PayPal Holdings and Thrivent Large

The main advantage of trading using opposite PayPal Holdings and Thrivent Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Thrivent Large 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 Thrivent Large will offset losses from the drop in Thrivent Large's long position.

The idea behind PayPal Holdings and Thrivent Large Cap 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.