Correlation Between Vipshop Holdings and Golden Entertainment
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and Golden Entertainment 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 Golden Entertainment 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 Golden Entertainment, you can compare the effects of market volatilities on Vipshop Holdings and Golden Entertainment 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 Golden Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Golden Entertainment.
Diversification Opportunities for Vipshop Holdings and Golden Entertainment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vipshop and Golden is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment 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 Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Golden Entertainment go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Golden Entertainment
Given the investment horizon of 90 days Vipshop Holdings is expected to generate 15.52 times less return on investment than Golden Entertainment. In addition to that, Vipshop Holdings is 1.24 times more volatile than Golden Entertainment. It trades about 0.01 of its total potential returns per unit of risk. Golden Entertainment is currently generating about 0.28 per unit of volatility. If you would invest 3,111 in Golden Entertainment on October 23, 2024 and sell it today you would earn a total of 216.00 from holding Golden Entertainment or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. Golden Entertainment
Performance |
| Timeline |
| Vipshop Holdings |
| Golden Entertainment |
Vipshop Holdings and Golden Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and Golden Entertainment
The main advantage of trading using opposite Vipshop Holdings and Golden Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, Golden Entertainment 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 Golden Entertainment will offset losses from the drop in Golden Entertainment'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 |
| Golden Entertainment vs. Red Rock Resorts | Golden Entertainment vs. Century Casinos | Golden Entertainment vs. Studio City International | Golden Entertainment vs. Ballys Corp |
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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