Correlation Between PDD Holdings and Revolve Group
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Revolve Group 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 Revolve Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Revolve Group LLC, you can compare the effects of market volatilities on PDD Holdings and Revolve Group 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 Revolve Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Revolve Group.
Diversification Opportunities for PDD Holdings and Revolve Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PDD and Revolve is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Revolve Group LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolve Group LLC 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 Revolve Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolve Group LLC has no effect on the direction of PDD Holdings i.e., PDD Holdings and Revolve Group go up and down completely randomly.
Pair Corralation between PDD Holdings and Revolve Group
Considering the 90-day investment horizon PDD Holdings is expected to under-perform the Revolve Group. But the stock apears to be less risky and, when comparing its historical volatility, PDD Holdings is 1.18 times less risky than Revolve Group. The stock trades about -0.05 of its potential returns per unit of risk. The Revolve Group LLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,900 in Revolve Group LLC on August 24, 2024 and sell it today you would earn a total of 1,582 from holding Revolve Group LLC or generate 83.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Revolve Group LLC
Performance |
| Timeline |
| PDD Holdings |
| Revolve Group LLC |
PDD Holdings and Revolve Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Revolve Group
The main advantage of trading using opposite PDD Holdings and Revolve Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Revolve Group 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 Revolve Group will offset losses from the drop in Revolve Group's long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
| Revolve Group vs. Sea | Revolve Group vs. MercadoLibre | Revolve Group vs. Jumia Technologies AG | Revolve Group vs. PDD Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |