Correlation Between NYSE Composite and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Vipshop Holdings Limited, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Vipshop Holdings.
Diversification Opportunities for NYSE Composite and Vipshop Holdings
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Vipshop is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Vipshop Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and Vipshop Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.36 times less return on investment than Vipshop Holdings. But when comparing it to its historical volatility, NYSE Composite is 3.8 times less risky than Vipshop Holdings. It trades about 0.07 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,167 in Vipshop Holdings Limited on August 23, 2024 and sell it today you would earn a total of 181.00 from holding Vipshop Holdings Limited or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Vipshop Holdings Limited
Performance |
| Timeline |
NYSE Composite and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Vipshop Holdings Limited
Pair trading matchups for Vipshop Holdings
Pair Trading with NYSE Composite and Vipshop Holdings
The main advantage of trading using opposite NYSE Composite and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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