Correlation Between 1StdibsCom and Baozun
Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and Baozun 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 1StdibsCom and Baozun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1StdibsCom and Baozun Inc, you can compare the effects of market volatilities on 1StdibsCom and Baozun 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 1StdibsCom with a short position of Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and Baozun.
Diversification Opportunities for 1StdibsCom and Baozun
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between 1StdibsCom and Baozun is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc and 1StdibsCom 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 1StdibsCom are associated (or correlated) with Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and Baozun go up and down completely randomly.
Pair Corralation between 1StdibsCom and Baozun
Given the investment horizon of 90 days 1StdibsCom is expected to under-perform the Baozun. But the stock apears to be less risky and, when comparing its historical volatility, 1StdibsCom is 1.56 times less risky than Baozun. The stock trades about -0.02 of its potential returns per unit of risk. The Baozun Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Baozun Inc on August 27, 2024 and sell it today you would lose (230.00) from holding Baozun Inc or give up 49.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1StdibsCom vs. Baozun Inc
Performance |
| Timeline |
| 1StdibsCom |
| Baozun Inc |
1StdibsCom and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1StdibsCom and Baozun
The main advantage of trading using opposite 1StdibsCom and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun's long position.| 1StdibsCom vs. Hour Loop | 1StdibsCom vs. Liquidity Services | 1StdibsCom vs. Qurate Retail Series | 1StdibsCom vs. Emerge Commerce |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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