Correlation Between Natural Health and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Natural Health and Vipshop Holdings 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 Natural Health and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and Vipshop Holdings Limited, you can compare the effects of market volatilities on Natural Health and Vipshop Holdings 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 Natural Health with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Vipshop Holdings.
Diversification Opportunities for Natural Health and Vipshop Holdings
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and Vipshop is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Natural Health 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 Natural Health Trend are associated (or correlated) with Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Natural Health i.e., Natural Health and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Natural Health and Vipshop Holdings
Given the investment horizon of 90 days Natural Health Trend is expected to generate 1.29 times more return on investment than Vipshop Holdings. However, Natural Health is 1.29 times more volatile than Vipshop Holdings Limited. It trades about -0.08 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.18 per unit of risk. If you would invest 582.00 in Natural Health Trend on August 28, 2024 and sell it today you would lose (30.00) from holding Natural Health Trend or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trend vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Natural Health Trend |
| Vipshop Holdings |
Natural Health and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Vipshop Holdings
The main advantage of trading using opposite Natural Health and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.| Natural Health vs. Inter Parfums | Natural Health vs. European Wax Center | Natural Health vs. Yatsen Holding | Natural Health vs. Edgewell Personal Care |
| Vipshop Holdings vs. JD Inc Adr | Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Sea | Vipshop Holdings vs. Jumia Technologies AG |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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