Correlation Between Baozun and Jumia Technologies
Can any of the company-specific risk be diversified away by investing in both Baozun and Jumia Technologies 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 Jumia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Jumia Technologies AG, you can compare the effects of market volatilities on Baozun and Jumia Technologies 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 Jumia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Jumia Technologies.
Diversification Opportunities for Baozun and Jumia Technologies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baozun and Jumia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Jumia Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumia Technologies 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 Jumia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumia Technologies has no effect on the direction of Baozun i.e., Baozun and Jumia Technologies go up and down completely randomly.
Pair Corralation between Baozun and Jumia Technologies
Given the investment horizon of 90 days Baozun Inc is expected to under-perform the Jumia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Baozun Inc is 1.51 times less risky than Jumia Technologies. The stock trades about -0.38 of its potential returns per unit of risk. The Jumia Technologies AG is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 476.00 in Jumia Technologies AG on August 26, 2024 and sell it today you would lose (96.00) from holding Jumia Technologies AG or give up 20.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baozun Inc vs. Jumia Technologies AG
Performance |
| Timeline |
| Baozun Inc |
| Jumia Technologies |
Baozun and Jumia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Jumia Technologies
The main advantage of trading using opposite Baozun and Jumia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Jumia Technologies 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 Jumia Technologies will offset losses from the drop in Jumia Technologies' long position.| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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