Correlation Between PDD Holdings and Baozun
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Baozun 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 PDD Holdings and Baozun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Baozun Inc, you can compare the effects of market volatilities on PDD Holdings and Baozun 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 PDD Holdings with a short position of Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Baozun.
Diversification Opportunities for PDD Holdings and Baozun
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PDD and Baozun is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc and PDD Holdings 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 PDD Holdings are associated (or correlated) with Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of PDD Holdings i.e., PDD Holdings and Baozun go up and down completely randomly.
Pair Corralation between PDD Holdings and Baozun
Considering the 90-day investment horizon PDD Holdings is expected to generate 0.6 times more return on investment than Baozun. However, PDD Holdings is 1.68 times less risky than Baozun. It trades about 0.11 of its potential returns per unit of risk. Baozun Inc is currently generating about -0.05 per unit of risk. If you would invest 10,100 in PDD Holdings on October 20, 2024 and sell it today you would earn a total of 457.00 from holding PDD Holdings or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Baozun Inc
Performance |
| Timeline |
| PDD Holdings |
| Baozun Inc |
PDD Holdings and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Baozun
The main advantage of trading using opposite PDD Holdings and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun's long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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