Correlation Between PayPal Holdings and Fbec Worldwide

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

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

Diversification Opportunities for PayPal Holdings and Fbec Worldwide

-0.15

Correlation Coefficient

PayPal Holdings  Fbec Worldwide

Good diversification

The 3 months correlation between PayPal and Fbec is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Fbec Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fbec Worldwide 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 Fbec Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fbec Worldwide has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Fbec Worldwide go up and down completely randomly.

Pair Corralation between PayPal Holdings and Fbec Worldwide

Given the investment horizon of 90 days PayPal Holdings is expected to generate 31.94 times less return on investment than Fbec Worldwide. But when comparing it to its historical volatility, PayPal Holdings is 45.03 times less risky than Fbec Worldwide. It trades about 0.24 of its potential returns per unit of risk. Fbec Worldwide is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Fbec Worldwide on September 17, 2024 and sell it today you would lose (0.03) from holding Fbec Worldwide or give up 37.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

PayPal Holdings  vs.  Fbec Worldwide

PayPal Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 16 (%) 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.

Fbec Worldwide

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fbec Worldwide are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Fbec Worldwide exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PayPal Holdings and Fbec Worldwide

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

The idea behind PayPal Holdings and Fbec Worldwide 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.