Correlation Between EBay and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both EBay and Jeffs Brands 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 Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eBay Inc and Jeffs Brands, you can compare the effects of market volatilities on EBay and Jeffs Brands 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 Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBay and Jeffs Brands.
Diversification Opportunities for EBay and Jeffs Brands
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EBay and Jeffs is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding eBay Inc and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands 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 Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of EBay i.e., EBay and Jeffs Brands go up and down completely randomly.
Pair Corralation between EBay and Jeffs Brands
Given the investment horizon of 90 days EBay is expected to generate 7.42 times less return on investment than Jeffs Brands. But when comparing it to its historical volatility, eBay Inc is 10.22 times less risky than Jeffs Brands. It trades about 0.08 of its potential returns per unit of risk. Jeffs Brands is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.99 in Jeffs Brands on August 30, 2024 and sell it today you would lose (0.99) from holding Jeffs Brands or give up 19.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 65.22% |
| Values | Daily Returns |
eBay Inc vs. Jeffs Brands
Performance |
| Timeline |
| eBay Inc |
| Jeffs Brands |
EBay and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBay and Jeffs Brands
The main advantage of trading using opposite EBay and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBay position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.The idea behind eBay Inc and Jeffs Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jeffs Brands vs. Jeffs Brands | Jeffs Brands vs. Sharps Technology Warrant | Jeffs Brands vs. bioAffinity Technologies Warrant | Jeffs Brands vs. Nocera 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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