Correlation Between Baozun and Revolve Group
Can any of the company-specific risk be diversified away by investing in both Baozun and Revolve Group 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 Revolve Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Revolve Group LLC, you can compare the effects of market volatilities on Baozun and Revolve Group 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 Revolve Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Revolve Group.
Diversification Opportunities for Baozun and Revolve Group
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baozun and Revolve is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Revolve Group LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolve Group LLC 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 Revolve Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolve Group LLC has no effect on the direction of Baozun i.e., Baozun and Revolve Group go up and down completely randomly.
Pair Corralation between Baozun and Revolve Group
Given the investment horizon of 90 days Baozun Inc is expected to under-perform the Revolve Group. But the stock apears to be less risky and, when comparing its historical volatility, Baozun Inc is 1.54 times less risky than Revolve Group. The stock trades about -0.06 of its potential returns per unit of risk. The Revolve Group LLC is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,527 in Revolve Group LLC on September 4, 2024 and sell it today you would earn a total of 1,096 from holding Revolve Group LLC or generate 43.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baozun Inc vs. Revolve Group LLC
Performance |
| Timeline |
| Baozun Inc |
| Revolve Group LLC |
Baozun and Revolve Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Revolve Group
The main advantage of trading using opposite Baozun and Revolve Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Revolve Group 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 Revolve Group will offset losses from the drop in Revolve Group's long position.| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
| Revolve Group vs. Appian Corp | Revolve Group vs. Okta Inc | Revolve Group vs. MongoDB | Revolve Group vs. Twilio Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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