Correlation Between PayPal Holdings and Arinsiri Land

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

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

Diversification Opportunities for PayPal Holdings and Arinsiri Land

0.4

Correlation Coefficient

PayPal Holdings  Arinsiri Land

Very weak diversification

The 3 months correlation between PayPal and Arinsiri is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Arinsiri Land Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arinsiri Land Public 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 Arinsiri Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arinsiri Land Public has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Arinsiri Land go up and down completely randomly.

Pair Corralation between PayPal Holdings and Arinsiri Land

Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Arinsiri Land. But the stock apears to be less risky and, when comparing its historical volatility, PayPal Holdings is 2.59 times less risky than Arinsiri Land. The stock trades about -0.16 of its potential returns per unit of risk. The Arinsiri Land Public is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Arinsiri Land Public on December 30, 2024 and sell it today you would lose (18.00) from holding Arinsiri Land Public or give up 28.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

PayPal Holdings  vs.  Arinsiri Land Public

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.

Arinsiri Land Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arinsiri Land Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals 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.

Pair Trading with PayPal Holdings and Arinsiri Land

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

The idea behind PayPal Holdings and Arinsiri Land Public 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.