Correlation Between EBay and WEBUY GLOBAL

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

By analyzing existing cross correlation between eBay Inc and WEBUY GLOBAL LTD, you can compare the effects of market volatilities on EBay and WEBUY GLOBAL 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 EBay with a short position of WEBUY GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBay and WEBUY GLOBAL.

Diversification Opportunities for EBay and WEBUY GLOBAL

-0.75

Correlation Coefficient

EBay  WEBUY GLOBAL

Pay attention - limited upside

The 3 months correlation between EBay and WEBUY is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding eBay Inc and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD and EBay 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 eBay Inc are associated (or correlated) with WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of EBay i.e., EBay and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between EBay and WEBUY GLOBAL

Given the investment horizon of 90 days EBay is expected to generate 1.11 times less return on investment than WEBUY GLOBAL. But when comparing it to its historical volatility, eBay Inc is 7.9 times less risky than WEBUY GLOBAL. It trades about 0.03 of its potential returns per unit of risk. WEBUY GLOBAL LTD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  17.00  in WEBUY GLOBAL LTD on December 19, 2024 and sell it today you would lose (11.82) from holding WEBUY GLOBAL LTD or give up 69.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

eBay Inc  vs.  WEBUY GLOBAL LTD

eBay Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in eBay Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, EBay is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

WEBUY GLOBAL LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEBUY GLOBAL LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, WEBUY GLOBAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EBay and WEBUY GLOBAL

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

The idea behind eBay Inc and WEBUY GLOBAL LTD 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.