Correlation Between Vipshop Holdings and ThredUp
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and ThredUp 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 ThredUp 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 ThredUp, you can compare the effects of market volatilities on Vipshop Holdings and ThredUp 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 ThredUp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and ThredUp.
Diversification Opportunities for Vipshop Holdings and ThredUp
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vipshop and ThredUp is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and ThredUp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThredUp 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 ThredUp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThredUp has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and ThredUp go up and down completely randomly.
Pair Corralation between Vipshop Holdings and ThredUp
Given the investment horizon of 90 days Vipshop Holdings is expected to generate 9.09 times less return on investment than ThredUp. But when comparing it to its historical volatility, Vipshop Holdings Limited is 2.66 times less risky than ThredUp. It trades about 0.01 of its potential returns per unit of risk. ThredUp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 155.00 in ThredUp on November 2, 2024 and sell it today you would earn a total of 66.00 from holding ThredUp or generate 42.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. ThredUp
Performance |
| Timeline |
| Vipshop Holdings |
| ThredUp |
Vipshop Holdings and ThredUp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and ThredUp
The main advantage of trading using opposite Vipshop Holdings and ThredUp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, ThredUp 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 ThredUp will offset losses from the drop in ThredUp'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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