Correlation Between Aarons and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Aarons and Vipshop Holdings 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 Aarons and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Aarons and Vipshop Holdings Limited, you can compare the effects of market volatilities on Aarons and Vipshop Holdings 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 Aarons with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aarons and Vipshop Holdings.
Diversification Opportunities for Aarons and Vipshop Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aarons and Vipshop is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Aarons and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Aarons 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 The Aarons are associated (or correlated) with Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Aarons i.e., Aarons and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Aarons and Vipshop Holdings
Considering the 90-day investment horizon The Aarons is expected to generate 1.16 times more return on investment than Vipshop Holdings. However, Aarons is 1.16 times more volatile than Vipshop Holdings Limited. It trades about 0.11 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.03 per unit of risk. If you would invest 704.00 in The Aarons on January 26, 2024 and sell it today you would earn a total of 39.00 from holding The Aarons or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Aarons vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Aarons |
| Vipshop Holdings |
Aarons and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aarons and Vipshop Holdings
The main advantage of trading using opposite Aarons and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aarons position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
| Vipshop Holdings vs. Pinduoduo | Vipshop Holdings vs. Sea | Vipshop Holdings vs. MercadoLibre | Vipshop Holdings vs. Alibaba Group Holding |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings 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 |