Correlation Between PayPal Holdings and Sekerbank TAS
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Sekerbank TAS 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 Sekerbank TAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Sekerbank TAS, you can compare the effects of market volatilities on PayPal Holdings and Sekerbank TAS 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 Sekerbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Sekerbank TAS.
Diversification Opportunities for PayPal Holdings and Sekerbank TAS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PayPal and Sekerbank is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS 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 Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Sekerbank TAS go up and down completely randomly.
Pair Corralation between PayPal Holdings and Sekerbank TAS
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Sekerbank TAS. In addition to that, PayPal Holdings is 1.98 times more volatile than Sekerbank TAS. It trades about -0.31 of its total potential returns per unit of risk. Sekerbank TAS is currently generating about -0.11 per unit of volatility. If you would invest 404.00 in Sekerbank TAS on December 2, 2024 and sell it today you would lose (17.00) from holding Sekerbank TAS or give up 4.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
PayPal Holdings vs. Sekerbank TAS
Performance |
Timeline |
PayPal Holdings |
Sekerbank TAS |
PayPal Holdings and Sekerbank TAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Sekerbank TAS
The main advantage of trading using opposite PayPal Holdings and Sekerbank TAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Sekerbank TAS 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 Sekerbank TAS will offset losses from the drop in Sekerbank TAS'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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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