85.51 +0.58 (+0.68%) Buy

PYPL continues to mint money for it's investors

13 min read

PYPL was among the best performers today. On a longer term basis, investors in PAYPAL HOLDINGS, INC. made -0.07% per day. Tuesday's performance of +0.68% was a significant outperformance compared to it's daily average.

[Themes containing PYPL]

PYPL showed a down trend over the last 3 months. During this period PYPL returned -7.25% and saw a maximum drawdown of -18.16%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in PYPL till volatility reduces and a clear trend emerges.


PYPL has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, PYPL outperformed the SP500 index on 54% days.

During the last three months PYPL was mostly loss making and delivered on average -0.08% per day. It's best return during this period (of +9.42%) was on Friday, 19 Oct, 2018. While it's worst loss in the same period (of -5.8%) was on Monday, 19 Nov, 2018. There was initially a bearish trend during this period which started on 26 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -3.78% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +6.51% to investors.

On monthly basis, PYPL delivered losses in more months over the last year, than profits. PYPL delivered profits less regularly than SP500 index. PYPL significantly outperformed SP500 index in Jan 2018, when it returned +15.55% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PYPL had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -11.91%.

Some of the people in finance touch enormous parts of the economy.
-- Stephen A. Schwarzman

PYPL is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in PYPL's volatility from 2 Oct, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that PYPL has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in PYPL derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

PYPL has more chance of extreme outcomes than the SP500 index. Therefore, PYPL must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than PYPL.

Based on your interest in PYPL you may find it interesting to know that AMZN and PFE are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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