Correlation Between PayPal Holdings and Flowery Gold
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Flowery Gold 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 Flowery Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Flowery Gold Mines, you can compare the effects of market volatilities on PayPal Holdings and Flowery Gold 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 Flowery Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Flowery Gold.
Diversification Opportunities for PayPal Holdings and Flowery Gold
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and Flowery is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Flowery Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowery Gold Mines 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 Flowery Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowery Gold Mines has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Flowery Gold go up and down completely randomly.
Pair Corralation between PayPal Holdings and Flowery Gold
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.52 times more return on investment than Flowery Gold. However, PayPal Holdings is 1.92 times less risky than Flowery Gold. It trades about 0.22 of its potential returns per unit of risk. Flowery Gold Mines is currently generating about -0.12 per unit of risk. If you would invest 7,036 in PayPal Holdings on September 12, 2024 and sell it today you would earn a total of 2,037 from holding PayPal Holdings or generate 28.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
PayPal Holdings vs. Flowery Gold Mines
Performance |
Timeline |
PayPal Holdings |
Flowery Gold Mines |
PayPal Holdings and Flowery Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Flowery Gold
The main advantage of trading using opposite PayPal Holdings and Flowery Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Flowery Gold 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 Flowery Gold will offset losses from the drop in Flowery Gold's long position.PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
Flowery Gold vs. Revival Gold | Flowery Gold vs. Galiano Gold | Flowery Gold vs. US Gold Corp | Flowery Gold vs. HUMANA INC |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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