Correlation Between PayPal Holdings and MOL PLC
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and MOL PLC 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 MOL PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and MOL PLC ADR, you can compare the effects of market volatilities on PayPal Holdings and MOL PLC 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 MOL PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and MOL PLC.
Diversification Opportunities for PayPal Holdings and MOL PLC
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PayPal and MOL is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and MOL PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL PLC ADR 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 MOL PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL PLC ADR has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and MOL PLC go up and down completely randomly.
Pair Corralation between PayPal Holdings and MOL PLC
Given the investment horizon of 90 days PayPal Holdings is expected to generate 1.4 times more return on investment than MOL PLC. However, PayPal Holdings is 1.4 times more volatile than MOL PLC ADR. It trades about 0.22 of its potential returns per unit of risk. MOL PLC ADR is currently generating about -0.08 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 1,995 from holding PayPal Holdings or generate 28.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. MOL PLC ADR
Performance |
Timeline |
PayPal Holdings |
MOL PLC ADR |
PayPal Holdings and MOL PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and MOL PLC
The main advantage of trading using opposite PayPal Holdings and MOL PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, MOL PLC 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 MOL PLC will offset losses from the drop in MOL PLC's long position.PayPal Holdings vs. SoFi Technologies | 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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