Correlation Between Etsy and Blue Apron
Can any of the company-specific risk be diversified away by investing in both Etsy and Blue Apron 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 Etsy and Blue Apron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etsy Inc and Blue Apron Holdings,, you can compare the effects of market volatilities on Etsy and Blue Apron 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 Etsy with a short position of Blue Apron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and Blue Apron.
Diversification Opportunities for Etsy and Blue Apron
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Etsy and Blue is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and Blue Apron Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Apron Holdings, and Etsy 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 Etsy Inc are associated (or correlated) with Blue Apron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Apron Holdings, has no effect on the direction of Etsy i.e., Etsy and Blue Apron go up and down completely randomly.
Pair Corralation between Etsy and Blue Apron
Given the investment horizon of 90 days Etsy Inc is expected to generate 0.3 times more return on investment than Blue Apron. However, Etsy Inc is 3.39 times less risky than Blue Apron. It trades about -0.06 of its potential returns per unit of risk. Blue Apron Holdings, is currently generating about -0.02 per unit of risk. If you would invest 13,721 in Etsy Inc on August 25, 2024 and sell it today you would lose (8,522) from holding Etsy Inc or give up 62.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Etsy Inc vs. Blue Apron Holdings,
Performance |
| Timeline |
| Etsy Inc |
| Blue Apron Holdings, |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Etsy and Blue Apron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etsy and Blue Apron
The main advantage of trading using opposite Etsy and Blue Apron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy position performs unexpectedly, Blue Apron 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 Blue Apron will offset losses from the drop in Blue Apron's long position.The idea behind Etsy Inc and Blue Apron Holdings, 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.| Blue Apron vs. Hour Loop | Blue Apron vs. Wayfair | Blue Apron vs. Kidpik Corp | Blue Apron vs. Oriental Culture Holding |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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