Correlation Between PayPal Holdings and NEXEN
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By analyzing existing cross correlation between PayPal Holdings and NEXEN INC 64, you can compare the effects of market volatilities on PayPal Holdings and NEXEN 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 NEXEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and NEXEN.
Diversification Opportunities for PayPal Holdings and NEXEN
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PayPal and NEXEN is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and NEXEN INC 64 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXEN INC 64 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 NEXEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXEN INC 64 has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and NEXEN go up and down completely randomly.
Pair Corralation between PayPal Holdings and NEXEN
Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.54 times more return on investment than NEXEN. However, PayPal Holdings is 2.54 times more volatile than NEXEN INC 64. It trades about 0.2 of its potential returns per unit of risk. NEXEN INC 64 is currently generating about -0.22 per unit of risk. If you would invest 7,107 in PayPal Holdings on September 15, 2024 and sell it today you would earn a total of 1,833 from holding PayPal Holdings or generate 25.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 20.31% |
Values | Daily Returns |
PayPal Holdings vs. NEXEN INC 64
Performance |
Timeline |
PayPal Holdings |
NEXEN INC 64 |
PayPal Holdings and NEXEN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and NEXEN
The main advantage of trading using opposite PayPal Holdings and NEXEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, NEXEN 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 NEXEN will offset losses from the drop in NEXEN's long position.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. American Express |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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