Correlation Between Getty Images and Etsy
Can any of the company-specific risk be diversified away by investing in both Getty Images and Etsy 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 Getty Images and Etsy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Etsy Inc, you can compare the effects of market volatilities on Getty Images and Etsy 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 Getty Images with a short position of Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Etsy.
Diversification Opportunities for Getty Images and Etsy
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Getty and Etsy is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc and Getty Images 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 Getty Images Holdings are associated (or correlated) with Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Getty Images i.e., Getty Images and Etsy go up and down completely randomly.
Pair Corralation between Getty Images and Etsy
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Etsy. In addition to that, Getty Images is 1.43 times more volatile than Etsy Inc. It trades about -0.06 of its total potential returns per unit of risk. Etsy Inc is currently generating about -0.05 per unit of volatility. If you would invest 7,885 in Etsy Inc on October 7, 2024 and sell it today you would lose (2,495) from holding Etsy Inc or give up 31.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Etsy Inc
Performance |
| Timeline |
| Getty Images Holdings |
| Etsy Inc |
Getty Images and Etsy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Etsy
The main advantage of trading using opposite Getty Images and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy's long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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