Correlation Between LightInTheBox Holding and Secoo Holding
Can any of the company-specific risk be diversified away by investing in both LightInTheBox Holding and Secoo Holding 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 LightInTheBox Holding and Secoo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightInTheBox Holding Co and Secoo Holding, you can compare the effects of market volatilities on LightInTheBox Holding and Secoo Holding 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 LightInTheBox Holding with a short position of Secoo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightInTheBox Holding and Secoo Holding.
Diversification Opportunities for LightInTheBox Holding and Secoo Holding
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between LightInTheBox and Secoo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LightInTheBox Holding Co and Secoo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secoo Holding and LightInTheBox Holding 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 LightInTheBox Holding Co are associated (or correlated) with Secoo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secoo Holding has no effect on the direction of LightInTheBox Holding i.e., LightInTheBox Holding and Secoo Holding go up and down completely randomly.
Pair Corralation between LightInTheBox Holding and Secoo Holding
Given the investment horizon of 90 days LightInTheBox Holding Co is expected to under-perform the Secoo Holding. But the stock apears to be less risky and, when comparing its historical volatility, LightInTheBox Holding Co is 3.12 times less risky than Secoo Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Secoo Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Secoo Holding on August 27, 2024 and sell it today you would lose (95.00) from holding Secoo Holding or give up 53.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.85% |
| Values | Daily Returns |
LightInTheBox Holding Co vs. Secoo Holding
Performance |
| Timeline |
| LightInTheBox Holding |
| Secoo Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LightInTheBox Holding and Secoo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightInTheBox Holding and Secoo Holding
The main advantage of trading using opposite LightInTheBox Holding and Secoo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightInTheBox Holding position performs unexpectedly, Secoo Holding 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 Secoo Holding will offset losses from the drop in Secoo Holding's long position.| LightInTheBox Holding vs. Kidpik Corp | LightInTheBox Holding vs. Qurate Retail Series | LightInTheBox Holding vs. Natural Health Trend | LightInTheBox Holding vs. Liquidity Services |
| Secoo Holding vs. Kidpik Corp | Secoo Holding vs. Qurate Retail Series | Secoo Holding vs. Natural Health Trend | Secoo Holding vs. Liquidity Services |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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