Correlation Between Vipshop Holdings and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both Vipshop Holdings and Hammer Metals 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 Vipshop Holdings and Hammer Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vipshop Holdings Limited and Hammer Metals Limited, you can compare the effects of market volatilities on Vipshop Holdings and Hammer Metals 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 Vipshop Holdings with a short position of Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Hammer Metals.
Diversification Opportunities for Vipshop Holdings and Hammer Metals
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vipshop and Hammer is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Hammer Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals Limited and Vipshop Holdings 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 Vipshop Holdings Limited are associated (or correlated) with Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals Limited has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Hammer Metals go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Hammer Metals
If you would invest 4.00 in Hammer Metals Limited on December 29, 2023 and sell it today you would earn a total of 0.00 from holding Hammer Metals Limited or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Vipshop Holdings Limited vs. Hammer Metals Limited
Performance |
Timeline |
Vipshop Holdings |
Hammer Metals Limited |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Vipshop Holdings and Hammer Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vipshop Holdings and Hammer Metals
The main advantage of trading using opposite Vipshop Holdings and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings position performs unexpectedly, Hammer Metals 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.Vipshop Holdings vs. LL Flooring Holdings | Vipshop Holdings vs. Home Depot | Vipshop Holdings vs. AutoNation | Vipshop Holdings vs. Macys Inc |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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