Correlation Between PayPal Holdings and Coveo Solutions

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

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

Diversification Opportunities for PayPal Holdings and Coveo Solutions

0.89

Correlation Coefficient

PayPal Holdings  Coveo Solutions

Very poor diversification

The 3 months correlation between PayPal and Coveo is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Coveo Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coveo Solutions 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 CDR are associated (or correlated) with Coveo Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coveo Solutions has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Coveo Solutions go up and down completely randomly.

Pair Corralation between PayPal Holdings and Coveo Solutions

Assuming the 90 days trading horizon PayPal Holdings is expected to generate 2.02 times less return on investment than Coveo Solutions. In addition to that, PayPal Holdings is 1.05 times more volatile than Coveo Solutions. It trades about 0.15 of its total potential returns per unit of risk. Coveo Solutions is currently generating about 0.33 per unit of volatility. If you would invest  609.00  in Coveo Solutions on April 24, 2025 and sell it today you would earn a total of  232.00  from holding Coveo Solutions or generate 38.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

PayPal Holdings CDR  vs.  Coveo Solutions

PayPal Holdings CDR

Risk-Adjusted Performance

Good

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

Coveo Solutions

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coveo Solutions are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Coveo Solutions displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PayPal Holdings and Coveo Solutions

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

The idea behind PayPal Holdings CDR and Coveo Solutions 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.