Correlation Between Baozun and Everus Construction
Can any of the company-specific risk be diversified away by investing in both Baozun and Everus Construction 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 Everus Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Everus Construction Group, you can compare the effects of market volatilities on Baozun and Everus Construction 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 Everus Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Everus Construction.
Diversification Opportunities for Baozun and Everus Construction
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baozun and Everus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Everus Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everus Construction 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 Everus Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everus Construction has no effect on the direction of Baozun i.e., Baozun and Everus Construction go up and down completely randomly.
Pair Corralation between Baozun and Everus Construction
Given the investment horizon of 90 days Baozun Inc is expected to generate 2.08 times more return on investment than Everus Construction. However, Baozun is 2.08 times more volatile than Everus Construction Group. It trades about 0.06 of its potential returns per unit of risk. Everus Construction Group is currently generating about 0.07 per unit of risk. If you would invest 266.00 in Baozun Inc on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Baozun Inc or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baozun Inc vs. Everus Construction Group
Performance |
| Timeline |
| Baozun Inc |
| Everus Construction |
Baozun and Everus Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Everus Construction
The main advantage of trading using opposite Baozun and Everus Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Everus Construction 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 Everus Construction will offset losses from the drop in Everus Construction's long position.| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
| Everus Construction vs. Here Media | Everus Construction vs. Sphere Entertainment Co | Everus Construction vs. Nok Airlines Public | Everus Construction vs. Dave Busters Entertainment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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