Correlation Between Vipshop Holdings and MOGU
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and MOGU 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 MOGU 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 MOGU Inc, you can compare the effects of market volatilities on Vipshop Holdings and MOGU 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 MOGU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and MOGU.
Diversification Opportunities for Vipshop Holdings and MOGU
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vipshop and MOGU is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU 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 MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and MOGU go up and down completely randomly.
Pair Corralation between Vipshop Holdings and MOGU
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to under-perform the MOGU. But the stock apears to be less risky and, when comparing its historical volatility, Vipshop Holdings Limited is 1.7 times less risky than MOGU. The stock trades about -0.09 of its potential returns per unit of risk. The MOGU Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 210.00 in MOGU Inc on August 31, 2024 and sell it today you would earn a total of 10.00 from holding MOGU Inc or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. MOGU Inc
Performance |
| Timeline |
| Vipshop Holdings |
| MOGU Inc |
Vipshop Holdings and MOGU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and MOGU
The main advantage of trading using opposite Vipshop Holdings and MOGU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, MOGU 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 MOGU will offset losses from the drop in MOGU'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 |
| MOGU vs. iPower Inc | MOGU vs. LightInTheBox Holding Co | MOGU vs. Qurate Retail Series | MOGU vs. Kidpik 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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