Correlation Between PayPal Holdings and Gold Bull
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Gold Bull 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 Gold Bull into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Gold Bull Resources, you can compare the effects of market volatilities on PayPal Holdings and Gold Bull 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 Gold Bull. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Gold Bull.
Diversification Opportunities for PayPal Holdings and Gold Bull
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Gold is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Gold Bull Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bull Resources 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 Gold Bull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bull Resources has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Gold Bull go up and down completely randomly.
Pair Corralation between PayPal Holdings and Gold Bull
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Gold Bull. But the stock apears to be less risky and, when comparing its historical volatility, PayPal Holdings is 5.06 times less risky than Gold Bull. The stock trades about -0.12 of its potential returns per unit of risk. The Gold Bull Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Gold Bull Resources on December 3, 2024 and sell it today you would earn a total of 15.00 from holding Gold Bull Resources or generate 78.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. Gold Bull Resources
Performance |
Timeline |
PayPal Holdings |
Gold Bull Resources |
PayPal Holdings and Gold Bull Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Gold Bull
The main advantage of trading using opposite PayPal Holdings and Gold Bull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Gold Bull 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 Gold Bull will offset losses from the drop in Gold Bull's long position.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
Gold Bull vs. Robex Resources | Gold Bull vs. Orefinders Resources | Gold Bull vs. Leviathan Gold | Gold Bull vs. Rover Metals Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |