Correlation Between Baozun and Etsy
Can any of the company-specific risk be diversified away by investing in both Baozun and Etsy 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 Etsy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Etsy Inc, you can compare the effects of market volatilities on Baozun and Etsy 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 Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Etsy.
Diversification Opportunities for Baozun and Etsy
Very good diversification
The 3 months correlation between Baozun and Etsy is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc 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 Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Baozun i.e., Baozun and Etsy go up and down completely randomly.
Pair Corralation between Baozun and Etsy
Given the investment horizon of 90 days Baozun Inc is expected to under-perform the Etsy. In addition to that, Baozun is 1.43 times more volatile than Etsy Inc. It trades about -0.16 of its total potential returns per unit of risk. Etsy Inc is currently generating about 0.25 per unit of volatility. If you would invest 4,748 in Etsy Inc on August 30, 2024 and sell it today you would earn a total of 683.00 from holding Etsy Inc or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baozun Inc vs. Etsy Inc
Performance |
| Timeline |
| Baozun Inc |
| Etsy Inc |
Baozun and Etsy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Etsy
The main advantage of trading using opposite Baozun and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy's long position.| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |