Correlation Between Vipshop Holdings and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and Jeffs Brands 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 Jeffs Brands 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 Jeffs Brands, you can compare the effects of market volatilities on Vipshop Holdings and Jeffs Brands 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 Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Jeffs Brands.
Diversification Opportunities for Vipshop Holdings and Jeffs Brands
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vipshop and Jeffs is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands 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 Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Jeffs Brands go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Jeffs Brands
Given the investment horizon of 90 days Vipshop Holdings is expected to generate 362.68 times less return on investment than Jeffs Brands. But when comparing it to its historical volatility, Vipshop Holdings Limited is 48.28 times less risky than Jeffs Brands. It trades about 0.02 of its potential returns per unit of risk. Jeffs Brands is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Jeffs Brands on August 27, 2024 and sell it today you would lose (23.39) from holding Jeffs Brands or give up 86.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.86% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. Jeffs Brands
Performance |
| Timeline |
| Vipshop Holdings |
| Jeffs Brands |
Vipshop Holdings and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and Jeffs Brands
The main advantage of trading using opposite Vipshop Holdings and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.| Vipshop Holdings vs. JD Inc Adr | Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Sea | Vipshop Holdings vs. Jumia Technologies AG |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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