Correlation Between PayPal Holdings and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and SPDR SSGA 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 SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and SPDR SSGA Gender, you can compare the effects of market volatilities on PayPal Holdings and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and SPDR SSGA.
Diversification Opportunities for PayPal Holdings and SPDR SSGA
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and SPDR is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and SPDR SSGA Gender in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Gender 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Gender has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and SPDR SSGA go up and down completely randomly.
Pair Corralation between PayPal Holdings and SPDR SSGA
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the SPDR SSGA. In addition to that, PayPal Holdings is 3.84 times more volatile than SPDR SSGA Gender. It trades about -0.11 of its total potential returns per unit of risk. SPDR SSGA Gender is currently generating about 0.01 per unit of volatility. If you would invest 12,091 in SPDR SSGA Gender on December 2, 2024 and sell it today you would earn a total of 10.00 from holding SPDR SSGA Gender or generate 0.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. SPDR SSGA Gender
Performance |
Timeline |
PayPal Holdings |
SPDR SSGA Gender |
PayPal Holdings and SPDR SSGA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and SPDR SSGA
The main advantage of trading using opposite PayPal Holdings and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA's long position.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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