Correlation Between Overstockcom and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Overstockcom 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 Overstockcom and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Overstockcom and Vipshop Holdings Limited, you can compare the effects of market volatilities on Overstockcom 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 Overstockcom with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Overstockcom and Vipshop Holdings.
Diversification Opportunities for Overstockcom and Vipshop Holdings
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Overstockcom and Vipshop is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Overstockcom and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings 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 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 Overstockcom i.e., Overstockcom and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Overstockcom and Vipshop Holdings
If you would invest 3,092 in Overstockcom on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Overstockcom or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Overstockcom vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Overstockcom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vipshop Holdings |
Overstockcom and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Overstockcom and Vipshop Holdings
The main advantage of trading using opposite Overstockcom and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Overstockcom 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.| Overstockcom vs. Etsy Inc | Overstockcom vs. Chewy Inc | Overstockcom vs. PDD Holdings | Overstockcom vs. Sea |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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