Correlation Between Tyson Foods and PayPal Holdings

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

By analyzing existing cross correlation between Tyson Foods and PayPal Holdings, you can compare the effects of market volatilities on Tyson Foods and PayPal Holdings 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 Tyson Foods with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and PayPal Holdings.

Diversification Opportunities for Tyson Foods and PayPal Holdings

-0.83

Correlation Coefficient

Tyson Foods  PayPal Holdings

Pay attention - limited upside

The 3 months correlation between Tyson and PayPal is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Tyson Foods 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 Tyson Foods are associated (or correlated) with PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of Tyson Foods i.e., Tyson Foods and PayPal Holdings go up and down completely randomly.

Pair Corralation between Tyson Foods and PayPal Holdings

Assuming the 90 days trading horizon Tyson Foods is expected to under-perform the PayPal Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Tyson Foods is 1.14 times less risky than PayPal Holdings. The stock trades about -0.16 of its potential returns per unit of risk. The PayPal Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,775  in PayPal Holdings on April 23, 2025 and sell it today you would earn a total of  306.00  from holding PayPal Holdings or generate 17.24% return on investment over 90 days.

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

Tyson Foods  vs.  PayPal Holdings

Tyson Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tyson Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PayPal Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PayPal Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tyson Foods and PayPal Holdings

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

The idea behind Tyson Foods and PayPal Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.