Correlation Between PayPal Holdings and Five Star
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Five Star 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 Five Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Five Star Bancorp, you can compare the effects of market volatilities on PayPal Holdings and Five Star 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 Five Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Five Star.
Diversification Opportunities for PayPal Holdings and Five Star
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between PayPal and Five is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Five Star Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Star Bancorp 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 Five Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Star Bancorp has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Five Star go up and down completely randomly.
Pair Corralation between PayPal Holdings and Five Star
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Five Star. In addition to that, PayPal Holdings is 1.62 times more volatile than Five Star Bancorp. It trades about -0.11 of its total potential returns per unit of risk. Five Star Bancorp is currently generating about -0.07 per unit of volatility. If you would invest 3,276 in Five Star Bancorp on December 2, 2024 and sell it today you would lose (230.00) from holding Five Star Bancorp or give up 7.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. Five Star Bancorp
Performance |
Timeline |
PayPal Holdings |
Five Star Bancorp |
PayPal Holdings and Five Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Five Star
The main advantage of trading using opposite PayPal Holdings and Five Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Five Star 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 Five Star will offset losses from the drop in Five Star's long position.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
Five Star vs. Community West Bancshares | Five Star vs. First Northwest Bancorp | Five Star vs. Home Federal Bancorp | Five Star vs. First Financial Northwest |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
CEOs Directory Screen CEOs from public companies around the world |