Correlation Between PayPal Holdings and Argentum
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Argentum 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 Argentum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Argentum 47, you can compare the effects of market volatilities on PayPal Holdings and Argentum 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 Argentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Argentum.
Diversification Opportunities for PayPal Holdings and Argentum
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PayPal and Argentum is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Argentum 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentum 47 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 Argentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentum 47 has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Argentum go up and down completely randomly.
Pair Corralation between PayPal Holdings and Argentum
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Argentum. But the stock apears to be less risky and, when comparing its historical volatility, PayPal Holdings is 10.08 times less risky than Argentum. The stock trades about -0.12 of its potential returns per unit of risk. The Argentum 47 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.52 in Argentum 47 on December 3, 2024 and sell it today you would earn a total of 0.31 from holding Argentum 47 or generate 59.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. Argentum 47
Performance |
Timeline |
PayPal Holdings |
Argentum 47 |
PayPal Holdings and Argentum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Argentum
The main advantage of trading using opposite PayPal Holdings and Argentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Argentum 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 Argentum will offset losses from the drop in Argentum's long position.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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