Correlation Between PayPal Holdings and Medipharm Labs

Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Medipharm Labs 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 Medipharm Labs 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 Medipharm Labs Corp, you can compare the effects of market volatilities on PayPal Holdings and Medipharm Labs 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 Medipharm Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Medipharm Labs.

Diversification Opportunities for PayPal Holdings and Medipharm Labs

-0.57

Correlation Coefficient

PayPal Holdings  Medipharm Labs

Excellent diversification

The 3 months correlation between PayPal and Medipharm is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings CDR and Medipharm Labs Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medipharm Labs 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 CDR are associated (or correlated) with Medipharm Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medipharm Labs Corp has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Medipharm Labs go up and down completely randomly.

Pair Corralation between PayPal Holdings and Medipharm Labs

Assuming the 90 days trading horizon PayPal Holdings CDR is expected to generate 0.32 times more return on investment than Medipharm Labs. However, PayPal Holdings CDR is 3.1 times less risky than Medipharm Labs. It trades about 0.15 of its potential returns per unit of risk. Medipharm Labs Corp is currently generating about -0.07 per unit of risk. If you would invest  480.00  in PayPal Holdings CDR on April 24, 2025 and sell it today you would earn a total of  79.00  from holding PayPal Holdings CDR or generate 16.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

PayPal Holdings CDR  vs.  Medipharm Labs Corp

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.

Medipharm Labs Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medipharm Labs Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PayPal Holdings and Medipharm Labs

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

The idea behind PayPal Holdings CDR and Medipharm Labs Corp 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 Global Correlations module to find global opportunities by holding instruments from different markets.