Correlation Between PayPal Holdings and ML Capital

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

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

Diversification Opportunities for PayPal Holdings and ML Capital

0.0

Correlation Coefficient

PayPal Holdings  ML Capital

Pay attention - limited upside

The 3 months correlation between PayPal and MLCG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and ML Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ML Capital Group 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 ML Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ML Capital Group has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and ML Capital go up and down completely randomly.

Pair Corralation between PayPal Holdings and ML Capital

If you would invest  0.01  in ML Capital Group on December 4, 2024 and sell it today you would earn a total of  0.00  from holding ML Capital Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

PayPal Holdings  vs.  ML Capital Group

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.

ML Capital Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days ML Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, ML Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PayPal Holdings and ML Capital

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

The idea behind PayPal Holdings and ML Capital Group 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.