Correlation Between Global E and Baozun
Can any of the company-specific risk be diversified away by investing in both Global E and Baozun 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 Global E and Baozun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and Baozun Inc, you can compare the effects of market volatilities on Global E and Baozun 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 Global E with a short position of Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Baozun.
Diversification Opportunities for Global E and Baozun
Very good diversification
The 3 months correlation between Global and Baozun is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc and Global E 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 Global E Online are associated (or correlated) with Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of Global E i.e., Global E and Baozun go up and down completely randomly.
Pair Corralation between Global E and Baozun
Given the investment horizon of 90 days Global E Online is expected to generate 0.38 times more return on investment than Baozun. However, Global E Online is 2.65 times less risky than Baozun. It trades about 0.17 of its potential returns per unit of risk. Baozun Inc is currently generating about -0.05 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. Baozun Inc
Performance |
| Timeline |
| Global E Online |
| Baozun Inc |
Global E and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and Baozun
The main advantage of trading using opposite Global E and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun's long position.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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