Correlation Between Etsy and Overstockcom
Can any of the company-specific risk be diversified away by investing in both Etsy and Overstockcom 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 Overstockcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etsy Inc and Overstockcom, you can compare the effects of market volatilities on Etsy and Overstockcom 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 Overstockcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and Overstockcom.
Diversification Opportunities for Etsy and Overstockcom
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Etsy and Overstockcom is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and Overstockcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstockcom 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 Overstockcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstockcom has no effect on the direction of Etsy i.e., Etsy and Overstockcom go up and down completely randomly.
Pair Corralation between Etsy and Overstockcom
If you would invest 4,964 in Etsy Inc on August 24, 2024 and sell it today you would earn a total of 266.00 from holding Etsy Inc or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Etsy Inc vs. Overstockcom
Performance |
| Timeline |
| Etsy Inc |
| Overstockcom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Etsy and Overstockcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etsy and Overstockcom
The main advantage of trading using opposite Etsy and Overstockcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy position performs unexpectedly, Overstockcom 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 Overstockcom will offset losses from the drop in Overstockcom's long position.The idea behind Etsy Inc and Overstockcom 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.| Overstockcom vs. Etsy Inc | Overstockcom vs. Chewy Inc | Overstockcom vs. PDD Holdings | Overstockcom vs. Sea |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |