Correlation Between EBay and Jumei Intl

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

Diversification Opportunities for EBay and Jumei Intl

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between EBay and Jumei is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EBay Inc and Jumei Intl Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumei Intl Hldg and EBay 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 EBay Inc are associated (or correlated) with Jumei Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumei Intl Hldg has no effect on the direction of EBay i.e., EBay and Jumei Intl go up and down completely randomly.

Pair Corralation between EBay and Jumei Intl

If you would invest  4,415  in EBay Inc on December 29, 2023 and sell it today you would earn a total of  777.00  from holding EBay Inc or generate 17.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

EBay Inc  vs.  Jumei Intl Hldg

 Performance 
       Timeline  
EBay Inc 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in EBay Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, EBay showed solid returns over the last few months and may actually be approaching a breakup point.
Jumei Intl Hldg 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Jumei Intl Hldg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Jumei Intl is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

EBay and Jumei Intl Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EBay and Jumei Intl

The main advantage of trading using opposite EBay and Jumei Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBay position performs unexpectedly, Jumei Intl 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 Jumei Intl will offset losses from the drop in Jumei Intl's long position.
The idea behind EBay Inc and Jumei Intl Hldg 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.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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