Correlation Between PayPal Holdings and Blackrock International

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

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

Diversification Opportunities for PayPal Holdings and Blackrock International

-0.66

Correlation Coefficient

PayPal Holdings  Blackrock International

Excellent diversification

The 3 months correlation between PayPal and Blackrock is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Blackrock International Divide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International 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 Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Blackrock International go up and down completely randomly.

Pair Corralation between PayPal Holdings and Blackrock International

Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.64 times more return on investment than Blackrock International. However, PayPal Holdings is 1.64 times more volatile than Blackrock International Dividend. It trades about 0.33 of its potential returns per unit of risk. Blackrock International Dividend is currently generating about -0.24 per unit of risk. If you would invest  7,813  in PayPal Holdings on September 4, 2024 and sell it today you would earn a total of  840.00  from holding PayPal Holdings or generate 10.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

PayPal Holdings  vs.  Blackrock International Divide

PayPal Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PayPal Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Blackrock International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock International Dividend has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with PayPal Holdings and Blackrock International

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

The idea behind PayPal Holdings and Blackrock International Dividend 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.