Correlation Between Whole Foods and Vipshop Holdings

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Can any of the company-specific risk be diversified away by investing in both Whole Foods 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 Whole Foods and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whole Foods Market and Vipshop Holdings Limited, you can compare the effects of market volatilities on Whole Foods 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 Whole Foods with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Foods and Vipshop Holdings.

Diversification Opportunities for Whole Foods and Vipshop Holdings

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Whole and Vipshop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Whole Foods Market and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Whole Foods 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 Whole Foods Market 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 Whole Foods i.e., Whole Foods and Vipshop Holdings go up and down completely randomly.

Pair Corralation between Whole Foods and Vipshop Holdings

If you would invest  790.00  in Vipshop Holdings Limited on December 30, 2023 and sell it today you would earn a total of  865.00  from holding Vipshop Holdings Limited or generate 109.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Whole Foods Market  vs.  Vipshop Holdings Limited

 Performance 
       Timeline  
Whole Foods Market 

Risk-Adjusted Performance

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Over the last 90 days Whole Foods Market has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Whole Foods is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Vipshop Holdings 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Vipshop Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vipshop Holdings is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Whole Foods and Vipshop Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Whole Foods and Vipshop Holdings

The main advantage of trading using opposite Whole Foods and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Foods 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.
The idea behind Whole Foods Market and Vipshop Holdings Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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