Correlation Between Baozun and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both Baozun and Qurate Retail 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 Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Qurate Retail Series, you can compare the effects of market volatilities on Baozun and Qurate Retail 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 Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Qurate Retail.
Diversification Opportunities for Baozun and Qurate Retail
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baozun and Qurate is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series 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 Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Baozun i.e., Baozun and Qurate Retail go up and down completely randomly.
Pair Corralation between Baozun and Qurate Retail
Given the investment horizon of 90 days Baozun Inc is expected to under-perform the Qurate Retail. But the stock apears to be less risky and, when comparing its historical volatility, Baozun Inc is 1.44 times less risky than Qurate Retail. The stock trades about -0.01 of its potential returns per unit of risk. The Qurate Retail Series is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 740.00 in Qurate Retail Series on August 24, 2024 and sell it today you would lose (438.00) from holding Qurate Retail Series or give up 59.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baozun Inc vs. Qurate Retail Series
Performance |
| Timeline |
| Baozun Inc |
| Qurate Retail Series |
Baozun and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Qurate Retail
The main advantage of trading using opposite Baozun and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
| Qurate Retail vs. Qurate Retail | Qurate Retail vs. Newegg Commerce | Qurate Retail vs. Kidpik Corp | Qurate Retail vs. Natural Health Trend |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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