Correlation Between EBay and Yunji

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

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

Diversification Opportunities for EBay and Yunji

0.25

Correlation Coefficient

EBay  Yunji

Modest diversification

The 3 months correlation between EBay and Yunji is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding eBay Inc and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji Inc 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 Yunji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunji Inc has no effect on the direction of EBay i.e., EBay and Yunji go up and down completely randomly.

Pair Corralation between EBay and Yunji

Given the investment horizon of 90 days eBay Inc is expected to generate 0.26 times more return on investment than Yunji. However, eBay Inc is 3.89 times less risky than Yunji. It trades about 0.07 of its potential returns per unit of risk. Yunji Inc is currently generating about 0.0 per unit of risk. If you would invest  5,132  in eBay Inc on December 27, 2024 and sell it today you would earn a total of  1,426  from holding eBay Inc or generate 27.79% return on investment over 90 days.

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

eBay Inc  vs.  Yunji Inc

eBay Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in eBay Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, EBay may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Yunji Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Yunji may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with EBay and Yunji

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

The idea behind eBay Inc and Yunji Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.