Correlation Between Overstockcom and Secoo Holding
Can any of the company-specific risk be diversified away by investing in both Overstockcom 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 Overstockcom and Secoo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Overstockcom and Secoo Holding, you can compare the effects of market volatilities on Overstockcom 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 Overstockcom with a short position of Secoo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Overstockcom and Secoo Holding.
Diversification Opportunities for Overstockcom and Secoo Holding
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Overstockcom and Secoo is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Overstockcom and Secoo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secoo Holding 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 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 Overstockcom i.e., Overstockcom and Secoo Holding go up and down completely randomly.
Pair Corralation between Overstockcom and Secoo Holding
If you would invest 83.00 in Secoo Holding on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Secoo Holding or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Overstockcom vs. Secoo Holding
Performance |
| Timeline |
| Overstockcom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Secoo Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Overstockcom and Secoo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Overstockcom and Secoo Holding
The main advantage of trading using opposite Overstockcom and Secoo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Overstockcom 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.| Overstockcom vs. Etsy Inc | Overstockcom vs. Chewy Inc | Overstockcom vs. PDD Holdings | Overstockcom vs. Sea |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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