Correlation Between Jumia Technologies and Yunji
Can any of the company-specific risk be diversified away by investing in both Jumia Technologies and Yunji 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 Yunji 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 Yunji Inc, you can compare the effects of market volatilities on Jumia Technologies and Yunji 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 Yunji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jumia Technologies and Yunji.
Diversification Opportunities for Jumia Technologies and Yunji
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jumia and Yunji is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jumia Technologies AG and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji 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 Yunji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunji Inc has no effect on the direction of Jumia Technologies i.e., Jumia Technologies and Yunji go up and down completely randomly.
Pair Corralation between Jumia Technologies and Yunji
Given the investment horizon of 90 days Jumia Technologies AG is expected to under-perform the Yunji. But the stock apears to be less risky and, when comparing its historical volatility, Jumia Technologies AG is 1.44 times less risky than Yunji. The stock trades about -0.2 of its potential returns per unit of risk. The Yunji Inc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 207.00 in Yunji Inc on August 29, 2024 and sell it today you would lose (37.00) from holding Yunji Inc or give up 17.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jumia Technologies AG vs. Yunji Inc
Performance |
| Timeline |
| Jumia Technologies |
| Yunji Inc |
Jumia Technologies and Yunji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jumia Technologies and Yunji
The main advantage of trading using opposite Jumia Technologies and Yunji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jumia Technologies position performs unexpectedly, Yunji 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 Yunji will offset losses from the drop in Yunji's long position.| Jumia Technologies vs. Sea | Jumia Technologies vs. MercadoLibre | Jumia Technologies vs. PDD Holdings | Jumia Technologies vs. JD Inc Adr |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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