Correlation Between Twilio and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Twilio 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 Twilio and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twilio Inc and Vipshop Holdings Limited, you can compare the effects of market volatilities on Twilio 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 Twilio with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twilio and Vipshop Holdings.
Diversification Opportunities for Twilio and Vipshop Holdings
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Twilio and Vipshop is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Twilio Inc and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Twilio 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 Twilio Inc 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 Twilio i.e., Twilio and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Twilio and Vipshop Holdings
Given the investment horizon of 90 days Twilio Inc is expected to generate 0.55 times more return on investment than Vipshop Holdings. However, Twilio Inc is 1.82 times less risky than Vipshop Holdings. It trades about 0.37 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.03 per unit of risk. If you would invest 9,641 in Twilio Inc on September 19, 2024 and sell it today you would earn a total of 1,518 from holding Twilio Inc or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Twilio Inc vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Twilio Inc |
| Vipshop Holdings |
Twilio and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twilio and Vipshop Holdings
The main advantage of trading using opposite Twilio and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twilio 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.| Twilio vs. Skillz Platform | Twilio vs. SoFi Technologies | Twilio vs. Clover Health Investments | Twilio vs. Opendoor Technologies |
| Vipshop Holdings vs. Twilio Inc | Vipshop Holdings vs. Getty Images Holdings | Vipshop Holdings vs. Baidu Inc | Vipshop Holdings vs. Snap Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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