Correlation Between Jumia Technologies and Etsy
Can any of the company-specific risk be diversified away by investing in both Jumia Technologies 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 Jumia Technologies and Etsy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jumia Technologies AG and Etsy Inc, you can compare the effects of market volatilities on Jumia Technologies 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 Jumia Technologies with a short position of Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jumia Technologies and Etsy.
Diversification Opportunities for Jumia Technologies and Etsy
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jumia and Etsy is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jumia Technologies AG and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc and Jumia Technologies 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 Jumia Technologies AG 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 Jumia Technologies i.e., Jumia Technologies and Etsy go up and down completely randomly.
Pair Corralation between Jumia Technologies and Etsy
Given the investment horizon of 90 days Jumia Technologies AG is expected to generate 2.19 times more return on investment than Etsy. However, Jumia Technologies is 2.19 times more volatile than Etsy Inc. It trades about 0.04 of its potential returns per unit of risk. Etsy Inc is currently generating about -0.05 per unit of risk. If you would invest 377.00 in Jumia Technologies AG on November 2, 2024 and sell it today you would earn a total of 44.00 from holding Jumia Technologies AG or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jumia Technologies AG vs. Etsy Inc
Performance |
| Timeline |
| Jumia Technologies |
| Etsy Inc |
Jumia Technologies and Etsy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jumia Technologies and Etsy
The main advantage of trading using opposite Jumia Technologies and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jumia Technologies 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.| Jumia Technologies vs. Sea | Jumia Technologies vs. MercadoLibre | Jumia Technologies vs. PDD Holdings | Jumia Technologies vs. JD Inc Adr |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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