Correlation Between Vipshop Holdings and Big Lots
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and Big Lots 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 Big Lots 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 Big Lots, you can compare the effects of market volatilities on Vipshop Holdings and Big Lots 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 Big Lots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Big Lots.
Diversification Opportunities for Vipshop Holdings and Big Lots
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vipshop and Big is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Big Lots in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Lots 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 Big Lots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Lots has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Big Lots go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Big Lots
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to generate 0.45 times more return on investment than Big Lots. However, Vipshop Holdings Limited is 2.24 times less risky than Big Lots. It trades about -0.03 of its potential returns per unit of risk. Big Lots is currently generating about -0.09 per unit of risk. If you would invest 1,670 in Vipshop Holdings Limited on January 20, 2024 and sell it today you would lose (154.00) from holding Vipshop Holdings Limited or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. Big Lots
Performance |
| Timeline |
| Vipshop Holdings |
| Big Lots |
Vipshop Holdings and Big Lots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and Big Lots
The main advantage of trading using opposite Vipshop Holdings and Big Lots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, Big Lots 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 Big Lots will offset losses from the drop in Big Lots' long position.| Vipshop Holdings vs. Shoe Carnival | Vipshop Holdings vs. Hibbett Sports | Vipshop Holdings vs. Citi Trends | Vipshop Holdings vs. Zumiez Inc |
| Big Lots vs. BJs Wholesale Club | Big Lots vs. Dollar General | Big Lots vs. Costco Wholesale Corp | Big Lots vs. Walmart |
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 Stocks Directory module to find actively traded stocks across global markets.
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