Correlation Between Overstockcom and Etsy
Can any of the company-specific risk be diversified away by investing in both Overstockcom and Etsy 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 Overstockcom and Etsy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Overstockcom and Etsy Inc, you can compare the effects of market volatilities on Overstockcom and Etsy 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 Overstockcom with a short position of Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Overstockcom and Etsy.
Diversification Opportunities for Overstockcom and Etsy
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Overstockcom and Etsy is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Overstockcom and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc and Overstockcom 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 Overstockcom are associated (or correlated) with Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Overstockcom i.e., Overstockcom and Etsy go up and down completely randomly.
Pair Corralation between Overstockcom and Etsy
If you would invest 4,964 in Etsy Inc on August 24, 2024 and sell it today you would earn a total of 266.00 from holding Etsy Inc or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Overstockcom vs. Etsy Inc
Performance |
| Timeline |
| Overstockcom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Etsy Inc |
Overstockcom and Etsy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Overstockcom and Etsy
The main advantage of trading using opposite Overstockcom and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Overstockcom position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy's long position.| Overstockcom vs. Etsy Inc | Overstockcom vs. Chewy Inc | Overstockcom vs. PDD Holdings | Overstockcom vs. Sea |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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