Correlation Between PayPal Holdings and Genscript Biotech

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

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

Diversification Opportunities for PayPal Holdings and Genscript Biotech

-0.76

Correlation Coefficient

PayPal Holdings  Genscript Biotech

Pay attention - limited upside

The 3 months correlation between PayPal and Genscript is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Genscript Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genscript Biotech 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 Genscript Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genscript Biotech has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Genscript Biotech go up and down completely randomly.

Pair Corralation between PayPal Holdings and Genscript Biotech

Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Genscript Biotech. But the stock apears to be less risky and, when comparing its historical volatility, PayPal Holdings is 2.27 times less risky than Genscript Biotech. The stock trades about -0.06 of its potential returns per unit of risk. The Genscript Biotech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  126.00  in Genscript Biotech on October 7, 2024 and sell it today you would earn a total of  1.00  from holding Genscript Biotech or generate 0.79% return on investment over 90 days.

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

PayPal Holdings  vs.  Genscript Biotech

PayPal Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, PayPal Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Genscript Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genscript Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PayPal Holdings and Genscript Biotech

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

The idea behind PayPal Holdings and Genscript Biotech 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.