Correlation Between Secoo Holding and Wayfair
Can any of the company-specific risk be diversified away by investing in both Secoo Holding and Wayfair 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 Secoo Holding and Wayfair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secoo Holding and Wayfair, you can compare the effects of market volatilities on Secoo Holding and Wayfair 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 Secoo Holding with a short position of Wayfair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secoo Holding and Wayfair.
Diversification Opportunities for Secoo Holding and Wayfair
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Secoo and Wayfair is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Secoo Holding and Wayfair in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayfair and Secoo Holding 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 Secoo Holding are associated (or correlated) with Wayfair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayfair has no effect on the direction of Secoo Holding i.e., Secoo Holding and Wayfair go up and down completely randomly.
Pair Corralation between Secoo Holding and Wayfair
If you would invest 4,283 in Wayfair on September 1, 2024 and sell it today you would earn a total of 341.00 from holding Wayfair or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Secoo Holding vs. Wayfair
Performance |
| Timeline |
| Secoo Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wayfair |
Secoo Holding and Wayfair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secoo Holding and Wayfair
The main advantage of trading using opposite Secoo Holding and Wayfair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secoo Holding position performs unexpectedly, Wayfair 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 Wayfair will offset losses from the drop in Wayfair's long position.| Secoo Holding vs. Kidpik Corp | Secoo Holding vs. Qurate Retail Series | Secoo Holding vs. Natural Health Trend | Secoo Holding vs. Liquidity Services |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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