Correlation Between Vipshop Holdings and ASOS Plc
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and ASOS Plc 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 Vipshop Holdings and ASOS Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vipshop Holdings Limited and ASOS plc PK, you can compare the effects of market volatilities on Vipshop Holdings and ASOS Plc 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 Vipshop Holdings with a short position of ASOS Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and ASOS Plc.
Diversification Opportunities for Vipshop Holdings and ASOS Plc
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vipshop and ASOS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and ASOS plc PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS plc PK and Vipshop 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 Vipshop Holdings Limited are associated (or correlated) with ASOS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS plc PK has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and ASOS Plc go up and down completely randomly.
Pair Corralation between Vipshop Holdings and ASOS Plc
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to under-perform the ASOS Plc. In addition to that, Vipshop Holdings is 1.11 times more volatile than ASOS plc PK. It trades about -0.03 of its total potential returns per unit of risk. ASOS plc PK is currently generating about 0.01 per unit of volatility. If you would invest 475.00 in ASOS plc PK on September 1, 2024 and sell it today you would earn a total of 0.00 from holding ASOS plc PK or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. ASOS plc PK
Performance |
| Timeline |
| Vipshop Holdings |
| ASOS plc PK |
Vipshop Holdings and ASOS Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and ASOS Plc
The main advantage of trading using opposite Vipshop Holdings and ASOS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, ASOS Plc 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 ASOS Plc will offset losses from the drop in ASOS Plc's long position.| Vipshop Holdings vs. PDD Holdings | Vipshop Holdings vs. JD Inc Adr | Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Sea |
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 Stocks Directory module to find actively traded stocks across global markets.
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