Correlation Between Farfetch and Jumia Technologies
Can any of the company-specific risk be diversified away by investing in both Farfetch and Jumia Technologies 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 Jumia Technologies 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 Jumia Technologies AG, you can compare the effects of market volatilities on Farfetch and Jumia Technologies 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 Jumia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farfetch and Jumia Technologies.
Diversification Opportunities for Farfetch and Jumia Technologies
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farfetch and Jumia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Farfetch Ltd Class and Jumia Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumia Technologies 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 Jumia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumia Technologies has no effect on the direction of Farfetch i.e., Farfetch and Jumia Technologies go up and down completely randomly.
Pair Corralation between Farfetch and Jumia Technologies
If you would invest 537.00 in Farfetch Ltd Class on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Farfetch Ltd Class or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Farfetch Ltd Class vs. Jumia Technologies AG
Performance |
| Timeline |
| Farfetch Class |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jumia Technologies |
Farfetch and Jumia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farfetch and Jumia Technologies
The main advantage of trading using opposite Farfetch and Jumia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farfetch position performs unexpectedly, Jumia Technologies 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 Jumia Technologies will offset losses from the drop in Jumia Technologies' long position.| Farfetch vs. JD Inc Adr | Farfetch vs. Alibaba Group Holding | Farfetch vs. Sea | Farfetch vs. Vipshop Holdings Limited |
| Jumia Technologies vs. Sea | Jumia Technologies vs. Wayfair | Jumia Technologies vs. Chewy Inc | Jumia Technologies vs. Vipshop Holdings Limited |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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