Correlation Between Vipshop Holdings and D MARKET
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and D MARKET 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 D MARKET 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 D MARKET Electronic Services, you can compare the effects of market volatilities on Vipshop Holdings and D MARKET 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 D MARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and D MARKET.
Diversification Opportunities for Vipshop Holdings and D MARKET
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vipshop and HEPS is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and D MARKET Electronic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D MARKET Electronic 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 D MARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D MARKET Electronic has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and D MARKET go up and down completely randomly.
Pair Corralation between Vipshop Holdings and D MARKET
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to generate 0.93 times more return on investment than D MARKET. However, Vipshop Holdings Limited is 1.08 times less risky than D MARKET. It trades about -0.25 of its potential returns per unit of risk. D MARKET Electronic Services is currently generating about -0.41 per unit of risk. If you would invest 1,470 in Vipshop Holdings Limited on August 27, 2024 and sell it today you would lose (146.00) from holding Vipshop Holdings Limited or give up 9.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. D MARKET Electronic Services
Performance |
| Timeline |
| Vipshop Holdings |
| D MARKET Electronic |
Vipshop Holdings and D MARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and D MARKET
The main advantage of trading using opposite Vipshop Holdings and D MARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, D MARKET 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 D MARKET will offset losses from the drop in D MARKET'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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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