Correlation Between Etsy and IMedia Brands
Can any of the company-specific risk be diversified away by investing in both Etsy and IMedia Brands 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 Etsy and IMedia Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etsy Inc and IMedia Brands, you can compare the effects of market volatilities on Etsy and IMedia Brands 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 Etsy with a short position of IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and IMedia Brands.
Diversification Opportunities for Etsy and IMedia Brands
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Etsy and IMedia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and IMedia Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands and Etsy 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 Etsy Inc are associated (or correlated) with IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands has no effect on the direction of Etsy i.e., Etsy and IMedia Brands go up and down completely randomly.
Pair Corralation between Etsy and IMedia Brands
If you would invest 0.04 in IMedia Brands on January 25, 2024 and sell it today you would earn a total of 0.00 from holding IMedia Brands or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.97% |
| Values | Daily Returns |
Etsy Inc vs. IMedia Brands
Performance |
| Timeline |
| Etsy Inc |
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Etsy and IMedia Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etsy and IMedia Brands
The main advantage of trading using opposite Etsy and IMedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy position performs unexpectedly, IMedia Brands 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 IMedia Brands will offset losses from the drop in IMedia Brands' long position.The idea behind Etsy Inc and IMedia Brands 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.| IMedia Brands vs. Janone Inc | IMedia Brands vs. Xcel Brands | IMedia Brands vs. FlexShopper | IMedia Brands vs. Monopar Therapeutics |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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