Correlation Between Tiffany and Vipshop Holdings

Can any of the company-specific risk be diversified away by investing in both Tiffany 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 Tiffany and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tiffany Co and Vipshop Holdings Limited, you can compare the effects of market volatilities on Tiffany 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 Tiffany with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiffany and Vipshop Holdings.

Diversification Opportunities for Tiffany and Vipshop Holdings

0.0

Correlation Coefficient

Tiffany  Vipshop Holdings

Pay attention - limited upside

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

Pair Corralation between Tiffany and Vipshop Holdings

If you would invest (100.00) in Tiffany Co on February 3, 2024 and sell it today you would earn a total of  100.00  from holding Tiffany Co or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tiffany Co  vs.  Vipshop Holdings Limited

Tiffany

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiffany Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Tiffany is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Vipshop Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vipshop Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tiffany and Vipshop Holdings

The main advantage of trading using opposite Tiffany and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiffany 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 Tiffany Co 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.