Correlation Between Vipshop Holdings and Funko
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and Funko 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 Funko 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 Funko Inc, you can compare the effects of market volatilities on Vipshop Holdings and Funko 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 Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Funko.
Diversification Opportunities for Vipshop Holdings and Funko
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vipshop and Funko is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc 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 Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Funko go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Funko
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to under-perform the Funko. But the stock apears to be less risky and, when comparing its historical volatility, Vipshop Holdings Limited is 1.62 times less risky than Funko. The stock trades about -0.14 of its potential returns per unit of risk. The Funko Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Funko Inc on August 30, 2024 and sell it today you would lose (41.00) from holding Funko Inc or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. Funko Inc
Performance |
| Timeline |
| Vipshop Holdings |
| Funko Inc |
Vipshop Holdings and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and Funko
The main advantage of trading using opposite Vipshop Holdings and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, Funko 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 Funko will offset losses from the drop in Funko's long position.| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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