Correlation Between PayPal Holdings and Catalyst Exceed

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

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

Diversification Opportunities for PayPal Holdings and Catalyst Exceed

0.89

Correlation Coefficient

PayPal Holdings  Catalyst Exceed

Very poor diversification

The 3 months correlation between PayPal and Catalyst is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Catalyst Exceed Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Exceed Defined 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 Catalyst Exceed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Exceed Defined has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Catalyst Exceed go up and down completely randomly.

Pair Corralation between PayPal Holdings and Catalyst Exceed

Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.39 times more return on investment than Catalyst Exceed. However, PayPal Holdings is 2.39 times more volatile than Catalyst Exceed Defined. It trades about 0.23 of its potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.15 per unit of risk. If you would invest  7,010  in PayPal Holdings on September 13, 2024 and sell it today you would earn a total of  2,065  from holding PayPal Holdings or generate 29.46% return on investment over 90 days.

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

PayPal Holdings  vs.  Catalyst Exceed Defined

PayPal Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 18 (%) 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.

Catalyst Exceed Defined

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Exceed Defined are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Catalyst Exceed may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PayPal Holdings and Catalyst Exceed

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

The idea behind PayPal Holdings and Catalyst Exceed Defined 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.