Correlation Between Qurate Retail and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Qurate Retail 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 Qurate Retail and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail and Vipshop Holdings Limited, you can compare the effects of market volatilities on Qurate Retail 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 Qurate Retail with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Vipshop Holdings.
Diversification Opportunities for Qurate Retail and Vipshop Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qurate and Vipshop is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Qurate Retail 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 Qurate Retail 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 Qurate Retail i.e., Qurate Retail and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Qurate Retail and Vipshop Holdings
Assuming the 90 days horizon Qurate Retail is expected to generate 1.09 times more return on investment than Vipshop Holdings. However, Qurate Retail is 1.09 times more volatile than Vipshop Holdings Limited. It trades about 0.16 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.18 per unit of risk. If you would invest 3,876 in Qurate Retail on August 27, 2024 and sell it today you would earn a total of 280.00 from holding Qurate Retail or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qurate Retail vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Qurate Retail |
| Vipshop Holdings |
Qurate Retail and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Vipshop Holdings
The main advantage of trading using opposite Qurate Retail and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail 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.| Qurate Retail vs. Qurate Retail Series | Qurate Retail vs. Qurate Retail Series | Qurate Retail vs. RLJ Lodging Trust | Qurate Retail vs. Liberty Broadband Srs |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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