Correlation Between Blue Apron and Emerge Commerce

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

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

Diversification Opportunities for Blue Apron and Emerge Commerce

0.07

Correlation Coefficient

Blue Apron  Emerge Commerce

Significant diversification

The 3 months correlation between Blue and Emerge is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings, and Emerge Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerge Commerce and Blue Apron 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 Blue Apron Holdings, are associated (or correlated) with Emerge Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerge Commerce has no effect on the direction of Blue Apron i.e., Blue Apron and Emerge Commerce go up and down completely randomly.

Pair Corralation between Blue Apron and Emerge Commerce

If you would invest  0.12  in Emerge Commerce on September 1, 2024 and sell it today you would earn a total of  2.39  from holding Emerge Commerce or generate 1991.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Blue Apron Holdings,  vs.  Emerge Commerce

Blue Apron Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Apron Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Blue Apron is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Emerge Commerce

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emerge Commerce are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, Emerge Commerce reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Apron and Emerge Commerce

The main advantage of trading using opposite Blue Apron and Emerge Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron position performs unexpectedly, Emerge Commerce 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 Emerge Commerce will offset losses from the drop in Emerge Commerce's long position.

The idea behind Blue Apron Holdings, and Emerge Commerce 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.