Correlation Between Jumia Technologies and Global E
Can any of the company-specific risk be diversified away by investing in both Jumia Technologies and Global E 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 Global E 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 Global E Online, you can compare the effects of market volatilities on Jumia Technologies and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jumia Technologies and Global E.
Diversification Opportunities for Jumia Technologies and Global E
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jumia and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jumia Technologies AG and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Jumia Technologies i.e., Jumia Technologies and Global E go up and down completely randomly.
Pair Corralation between Jumia Technologies and Global E
Given the investment horizon of 90 days Jumia Technologies AG is expected to under-perform the Global E. In addition to that, Jumia Technologies is 1.58 times more volatile than Global E Online. It trades about -0.17 of its total potential returns per unit of risk. Global E Online is currently generating about 0.4 per unit of volatility. If you would invest 3,849 in Global E Online on August 27, 2024 and sell it today you would earn a total of 1,140 from holding Global E Online or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jumia Technologies AG vs. Global E Online
Performance |
| Timeline |
| Jumia Technologies |
| Global E Online |
Jumia Technologies and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jumia Technologies and Global E
The main advantage of trading using opposite Jumia Technologies and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jumia Technologies position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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