Correlation Between Farfetch and Global E
Can any of the company-specific risk be diversified away by investing in both Farfetch and Global E 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 Farfetch and Global E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farfetch Ltd Class and Global E Online, you can compare the effects of market volatilities on Farfetch and Global E 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 Farfetch with a short position of Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farfetch and Global E.
Diversification Opportunities for Farfetch and Global E
Very poor diversification
The 3 months correlation between Farfetch and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Farfetch Ltd Class and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and Farfetch 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 Farfetch Ltd Class are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Farfetch i.e., Farfetch and Global E go up and down completely randomly.
Pair Corralation between Farfetch and Global E
If you would invest 5,352 in Global E Online on October 20, 2024 and sell it today you would earn a total of 258.00 from holding Global E Online or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.0% |
| Values | Daily Returns |
Farfetch Ltd Class vs. Global E Online
Performance |
| Timeline |
| Farfetch Class |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Global E Online |
Farfetch and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farfetch and Global E
The main advantage of trading using opposite Farfetch and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farfetch position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.| Farfetch vs. JD Inc Adr | Farfetch vs. Alibaba Group Holding | Farfetch vs. Sea | Farfetch vs. Vipshop Holdings Limited |
| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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