Correlation Between PayPal Holdings and Excel Corp
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Excel Corp 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 Excel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Excel Corp, you can compare the effects of market volatilities on PayPal Holdings and Excel Corp 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 Excel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Excel Corp.
Diversification Opportunities for PayPal Holdings and Excel Corp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between PayPal and Excel is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Excel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excel Corp 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 Excel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excel Corp has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Excel Corp go up and down completely randomly.
Pair Corralation between PayPal Holdings and Excel Corp
Given the investment horizon of 90 days PayPal Holdings is expected to generate 0.06 times more return on investment than Excel Corp. However, PayPal Holdings is 16.76 times less risky than Excel Corp. It trades about -0.09 of its potential returns per unit of risk. Excel Corp is currently generating about -0.22 per unit of risk. If you would invest 6,667 in PayPal Holdings on January 26, 2024 and sell it today you would lose (183.00) from holding PayPal Holdings or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PayPal Holdings vs. Excel Corp
Performance |
| Timeline |
| PayPal Holdings |
| Excel Corp |
PayPal Holdings and Excel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PayPal Holdings and Excel Corp
The main advantage of trading using opposite PayPal Holdings and Excel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Excel Corp 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 Excel Corp will offset losses from the drop in Excel Corp's long position.| PayPal Holdings vs. Senmiao Technology | PayPal Holdings vs. X Financial Class | PayPal Holdings vs. Yirendai | PayPal Holdings vs. Qudian Inc |
| Excel Corp vs. Castellum | Excel Corp vs. Soluna Holdings | Excel Corp vs. Appen Limited | Excel Corp vs. Usio Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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