Correlation Between SVB Financial and EBay
Can any of the company-specific risk be diversified away by investing in both SVB Financial and EBay 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 SVB Financial and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB Financial Group and eBay Inc, you can compare the effects of market volatilities on SVB Financial and EBay 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 SVB Financial with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB Financial and EBay.
Diversification Opportunities for SVB Financial and EBay
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SVB and EBay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and SVB Financial 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 SVB Financial Group are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of SVB Financial i.e., SVB Financial and EBay go up and down completely randomly.
Pair Corralation between SVB Financial and EBay
Assuming the 90 days trading horizon SVB Financial Group is expected to under-perform the EBay. In addition to that, SVB Financial is 1.53 times more volatile than eBay Inc. It trades about -0.04 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.07 per unit of volatility. If you would invest 10,860 in eBay Inc on August 30, 2024 and sell it today you would earn a total of 8,085 from holding eBay Inc or generate 74.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
SVB Financial Group vs. eBay Inc
Performance |
| Timeline |
| SVB Financial Group |
| eBay Inc |
SVB Financial and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB Financial and EBay
The main advantage of trading using opposite SVB Financial and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB Financial position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| SVB Financial vs. HDFC Bank Limited | SVB Financial vs. Ita Unibanco Holding | SVB Financial vs. Itasa Investimentos | SVB Financial vs. BRB Banco |
| EBay vs. Sumitomo Mitsui Financial | EBay vs. Capital One Financial | EBay vs. Marvell Technology | EBay vs. Bank of America |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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