Correlation Between Vipshop Holdings and Kidpik Corp
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and Kidpik Corp 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 Kidpik Corp 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 Kidpik Corp, you can compare the effects of market volatilities on Vipshop Holdings and Kidpik Corp 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 Kidpik Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Kidpik Corp.
Diversification Opportunities for Vipshop Holdings and Kidpik Corp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vipshop and Kidpik is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Kidpik Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidpik Corp 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 Kidpik Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidpik Corp has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Kidpik Corp go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Kidpik Corp
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to generate 0.17 times more return on investment than Kidpik Corp. However, Vipshop Holdings Limited is 5.8 times less risky than Kidpik Corp. It trades about 0.07 of its potential returns per unit of risk. Kidpik Corp is currently generating about -0.34 per unit of risk. If you would invest 1,354 in Vipshop Holdings Limited on October 25, 2024 and sell it today you would earn a total of 86.00 from holding Vipshop Holdings Limited or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. Kidpik Corp
Performance |
| Timeline |
| Vipshop Holdings |
| Kidpik Corp |
Vipshop Holdings and Kidpik Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and Kidpik Corp
The main advantage of trading using opposite Vipshop Holdings and Kidpik Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, Kidpik Corp 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 Kidpik Corp will offset losses from the drop in Kidpik Corp'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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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