Correlation Between Dicks Sporting and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Dicks Sporting and Vipshop Holdings 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 Dicks Sporting and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicks Sporting Goods and Vipshop Holdings Limited, you can compare the effects of market volatilities on Dicks Sporting and Vipshop Holdings 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 Dicks Sporting with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and Vipshop Holdings.
Diversification Opportunities for Dicks Sporting and Vipshop Holdings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dicks and Vipshop is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Dicks Sporting 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 Dicks Sporting Goods are associated (or correlated) with Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Dicks Sporting i.e., Dicks Sporting and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Dicks Sporting and Vipshop Holdings
Considering the 90-day investment horizon Dicks Sporting Goods is expected to under-perform the Vipshop Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Dicks Sporting Goods is 1.56 times less risky than Vipshop Holdings. The stock trades about -0.23 of its potential returns per unit of risk. The Vipshop Holdings Limited is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Vipshop Holdings Limited on August 23, 2024 and sell it today you would lose (46.00) from holding Vipshop Holdings Limited or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicks Sporting Goods vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Dicks Sporting Goods |
| Vipshop Holdings |
Dicks Sporting and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicks Sporting and Vipshop Holdings
The main advantage of trading using opposite Dicks Sporting and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.| Dicks Sporting vs. Winmark | Dicks Sporting vs. Arko Corp | Dicks Sporting vs. ABIVAX Socit Anonyme | Dicks Sporting vs. SCOR PK |
| Vipshop Holdings vs. JD Inc Adr | Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Sea | Vipshop Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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