Correlation Between PayPal Holdings and Aumann AG
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Aumann AG 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 Aumann AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Aumann AG, you can compare the effects of market volatilities on PayPal Holdings and Aumann AG 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 Aumann AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Aumann AG.
Diversification Opportunities for PayPal Holdings and Aumann AG
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Aumann is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Aumann AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumann AG 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 Aumann AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumann AG has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Aumann AG go up and down completely randomly.
Pair Corralation between PayPal Holdings and Aumann AG
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Aumann AG. But the stock apears to be less risky and, when comparing its historical volatility, PayPal Holdings is 1.1 times less risky than Aumann AG. The stock trades about -0.13 of its potential returns per unit of risk. The Aumann AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,050 in Aumann AG on December 29, 2024 and sell it today you would earn a total of 250.00 from holding Aumann AG or generate 23.81% 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. Aumann AG
Performance |
Timeline |
PayPal Holdings |
Aumann AG |
PayPal Holdings and Aumann AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Aumann AG
The main advantage of trading using opposite PayPal Holdings and Aumann AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Aumann AG 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 Aumann AG will offset losses from the drop in Aumann AG'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 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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