Correlation Between Pinduoduo and LightInTheBox Holding
Can any of the company-specific risk be diversified away by investing in both Pinduoduo and LightInTheBox Holding 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 Pinduoduo and LightInTheBox Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinduoduo and LightInTheBox Holding Co, you can compare the effects of market volatilities on Pinduoduo and LightInTheBox Holding 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 Pinduoduo with a short position of LightInTheBox Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinduoduo and LightInTheBox Holding.
Diversification Opportunities for Pinduoduo and LightInTheBox Holding
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pinduoduo and LightInTheBox is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pinduoduo and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding and Pinduoduo 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 Pinduoduo are associated (or correlated) with LightInTheBox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightInTheBox Holding has no effect on the direction of Pinduoduo i.e., Pinduoduo and LightInTheBox Holding go up and down completely randomly.
Pair Corralation between Pinduoduo and LightInTheBox Holding
Considering the 90-day investment horizon Pinduoduo is expected to generate 0.52 times more return on investment than LightInTheBox Holding. However, Pinduoduo is 1.93 times less risky than LightInTheBox Holding. It trades about 0.1 of its potential returns per unit of risk. LightInTheBox Holding Co is currently generating about 0.0 per unit of risk. If you would invest 11,916 in Pinduoduo on February 1, 2024 and sell it today you would earn a total of 602.00 from holding Pinduoduo or generate 5.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pinduoduo vs. LightInTheBox Holding Co
Performance |
Timeline |
Pinduoduo |
LightInTheBox Holding |
Pinduoduo and LightInTheBox Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pinduoduo and LightInTheBox Holding
The main advantage of trading using opposite Pinduoduo and LightInTheBox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinduoduo position performs unexpectedly, LightInTheBox Holding 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 LightInTheBox Holding will offset losses from the drop in LightInTheBox Holding's long position.The idea behind Pinduoduo and LightInTheBox Holding Co 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.LightInTheBox Holding vs. Qurate Retail | LightInTheBox Holding vs. Natural Health Trend | LightInTheBox Holding vs. iPower Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
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 | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Transaction History View history of all your transactions and understand their impact on performance |