Correlation Between PayPal Holdings and Fidelity Global

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

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

Diversification Opportunities for PayPal Holdings and Fidelity Global

-0.29

Correlation Coefficient

PayPal Holdings  Fidelity Global

Very good diversification

The 3 months correlation between PayPal and Fidelity is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Fidelity Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Value 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 Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Value has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Fidelity Global go up and down completely randomly.

Pair Corralation between PayPal Holdings and Fidelity Global

Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.68 times more return on investment than Fidelity Global. However, PayPal Holdings is 1.68 times more volatile than Fidelity Global Value. It trades about 0.01 of its potential returns per unit of risk. Fidelity Global Value is currently generating about -0.03 per unit of risk. If you would invest  7,261  in PayPal Holdings on December 2, 2024 and sell it today you would lose (156.00) from holding PayPal Holdings or give up 2.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.34%
Values	Daily Returns

PayPal Holdings  vs.  Fidelity Global Value

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.

Fidelity Global Value

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Value are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PayPal Holdings and Fidelity Global

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

The idea behind PayPal Holdings and Fidelity Global Value 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.