Correlation Between Dada Nexus and Sea
Can any of the company-specific risk be diversified away by investing in both Dada Nexus and Sea 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 Dada Nexus and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dada Nexus and Sea, you can compare the effects of market volatilities on Dada Nexus and Sea 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 Dada Nexus with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dada Nexus and Sea.
Diversification Opportunities for Dada Nexus and Sea
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dada and Sea is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dada Nexus and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and Dada Nexus 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 Dada Nexus are associated (or correlated) with Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Dada Nexus i.e., Dada Nexus and Sea go up and down completely randomly.
Pair Corralation between Dada Nexus and Sea
Given the investment horizon of 90 days Dada Nexus is expected to under-perform the Sea. In addition to that, Dada Nexus is 1.63 times more volatile than Sea. It trades about -0.17 of its total potential returns per unit of risk. Sea is currently generating about 0.29 per unit of volatility. If you would invest 9,599 in Sea on August 30, 2024 and sell it today you would earn a total of 1,972 from holding Sea or generate 20.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dada Nexus vs. Sea
Performance |
| Timeline |
| Dada Nexus |
| Sea |
Dada Nexus and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dada Nexus and Sea
The main advantage of trading using opposite Dada Nexus and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dada Nexus position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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