Correlation Between Etsy and Reebonz Holding

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

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

Diversification Opportunities for Etsy and Reebonz Holding

0.0

Correlation Coefficient

Etsy  Reebonz Holding

Pay attention - limited upside

The 3 months correlation between Etsy and Reebonz is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and Reebonz Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reebonz Holding and Etsy 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 Etsy Inc are associated (or correlated) with Reebonz Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reebonz Holding has no effect on the direction of Etsy i.e., Etsy and Reebonz Holding go up and down completely randomly.

Pair Corralation between Etsy and Reebonz Holding

If you would invest  5,476  in Etsy Inc on September 3, 2024 and sell it today you would earn a total of  10.00  from holding Etsy Inc or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Etsy Inc  vs.  Reebonz Holding

Etsy Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Etsy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Reebonz Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Etsy and Reebonz Holding

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

The idea behind Etsy Inc and Reebonz Holding 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.