Correlation Between EBay and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both EBay 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 EBay and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eBay Inc and Qurate Retail Series, you can compare the effects of market volatilities on EBay 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 EBay with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBay and Qurate Retail.
Diversification Opportunities for EBay and Qurate Retail
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EBay and Qurate is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding eBay 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 EBay 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 eBay 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 EBay i.e., EBay and Qurate Retail go up and down completely randomly.
Pair Corralation between EBay and Qurate Retail
Assuming the 90 days horizon eBay Inc is expected to generate 0.35 times more return on investment than Qurate Retail. However, eBay Inc is 2.87 times less risky than Qurate Retail. It trades about 0.11 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.05 per unit of risk. If you would invest 3,856 in eBay Inc on August 25, 2024 and sell it today you would earn a total of 1,932 from holding eBay Inc or generate 50.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eBay Inc vs. Qurate Retail Series
Performance |
| Timeline |
| eBay Inc |
| Qurate Retail Series |
EBay and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBay and Qurate Retail
The main advantage of trading using opposite EBay and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBay 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.| EBay vs. UNITED UTILITIES GR | EBay vs. OFFICE DEPOT | EBay vs. Eastman Chemical | EBay vs. Soken Chemical Engineering |
| Qurate Retail vs. eBay Inc | Qurate Retail vs. Superior Plus Corp | Qurate Retail vs. NMI Holdings | Qurate Retail vs. Origin Agritech |
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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