Correlation Between Baozun and Bravada Intl
Can any of the company-specific risk be diversified away by investing in both Baozun and Bravada Intl 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 Baozun and Bravada Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Bravada Intl, you can compare the effects of market volatilities on Baozun and Bravada Intl 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 Baozun with a short position of Bravada Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Bravada Intl.
Diversification Opportunities for Baozun and Bravada Intl
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baozun and Bravada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Bravada Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravada Intl and Baozun 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 Baozun Inc are associated (or correlated) with Bravada Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravada Intl has no effect on the direction of Baozun i.e., Baozun and Bravada Intl go up and down completely randomly.
Pair Corralation between Baozun and Bravada Intl
Given the investment horizon of 90 days Baozun Inc is expected to under-perform the Bravada Intl. But the stock apears to be less risky and, when comparing its historical volatility, Baozun Inc is 2.46 times less risky than Bravada Intl. The stock trades about -0.01 of its potential returns per unit of risk. The Bravada Intl is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.13 in Bravada Intl on September 2, 2024 and sell it today you would lose (0.12) from holding Bravada Intl or give up 92.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Baozun Inc vs. Bravada Intl
Performance |
| Timeline |
| Baozun Inc |
| Bravada Intl |
Baozun and Bravada Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Bravada Intl
The main advantage of trading using opposite Baozun and Bravada Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Bravada Intl 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 Bravada Intl will offset losses from the drop in Bravada Intl's long position.| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
| Bravada Intl vs. PDD Holdings | Bravada Intl vs. JD Inc Adr | Bravada Intl vs. Baozun Inc | Bravada Intl vs. Global E Online |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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