Correlation Between PayPal Holdings and Virtus International
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Virtus 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 Virtus 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 Virtus International Small Cap, you can compare the effects of market volatilities on PayPal Holdings and Virtus 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 Virtus International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Virtus International.
Diversification Opportunities for PayPal Holdings and Virtus International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and VIRTUS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Virtus International Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus 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 Virtus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus International has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Virtus International go up and down completely randomly.
Pair Corralation between PayPal Holdings and Virtus International
Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.59 times more return on investment than Virtus International. However, PayPal Holdings is 2.59 times more volatile than Virtus International Small Cap. It trades about 0.23 of its potential returns per unit of risk. Virtus International Small Cap is currently generating about 0.01 per unit of risk. If you would invest 6,935 in PayPal Holdings on September 9, 2024 and sell it today you would earn a total of 2,053 from holding PayPal Holdings or generate 29.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. Virtus International Small Cap
Performance |
Timeline |
PayPal Holdings |
Virtus International |
PayPal Holdings and Virtus International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Virtus International
The main advantage of trading using opposite PayPal Holdings and Virtus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Virtus 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 Virtus International will offset losses from the drop in Virtus International's long position.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
Virtus International vs. Virtus Kar Small Cap | Virtus International vs. Virtus Kar Small Cap | Virtus International vs. Virtus Kar Mid Cap | Virtus International vs. Virtus Kar Mid Cap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |