Correlation Between Global E and Vera Bradley
Can any of the company-specific risk be diversified away by investing in both Global E and Vera Bradley 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 Vera Bradley 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 Vera Bradley, you can compare the effects of market volatilities on Global E and Vera Bradley 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 Vera Bradley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Vera Bradley.
Diversification Opportunities for Global E and Vera Bradley
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Vera is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Vera Bradley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vera Bradley 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 Vera Bradley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vera Bradley has no effect on the direction of Global E i.e., Global E and Vera Bradley go up and down completely randomly.
Pair Corralation between Global E and Vera Bradley
Given the investment horizon of 90 days Global E Online is expected to generate 1.22 times more return on investment than Vera Bradley. However, Global E is 1.22 times more volatile than Vera Bradley. It trades about 0.08 of its potential returns per unit of risk. Vera Bradley is currently generating about 0.02 per unit of risk. If you would invest 1,906 in Global E Online on September 13, 2024 and sell it today you would earn a total of 3,628 from holding Global E Online or generate 190.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Global E Online vs. Vera Bradley
Performance |
| Timeline |
| Global E Online |
| Vera Bradley |
Global E and Vera Bradley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and Vera Bradley
The main advantage of trading using opposite Global E and Vera Bradley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E position performs unexpectedly, Vera Bradley 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 Vera Bradley will offset losses from the drop in Vera Bradley's long position.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| Vera Bradley vs. Digital Brands Group | Vera Bradley vs. Data Storage | Vera Bradley vs. Auddia Inc | Vera Bradley vs. DatChat Series A |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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