Correlation Between Jeffs Brands and Etsy

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

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

Diversification Opportunities for Jeffs Brands and Etsy

0.77

Correlation Coefficient

Jeffs Brands  Etsy

Poor diversification

The 3 months correlation between Jeffs and Etsy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jeffs Brands and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc and Jeffs Brands 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 Jeffs Brands are associated (or correlated) with Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Jeffs Brands i.e., Jeffs Brands and Etsy go up and down completely randomly.

Pair Corralation between Jeffs Brands and Etsy

Given the investment horizon of 90 days Jeffs Brands is expected to under-perform the Etsy. In addition to that, Jeffs Brands is 1.76 times more volatile than Etsy Inc. It trades about -0.24 of its total potential returns per unit of risk. Etsy Inc is currently generating about -0.07 per unit of volatility. If you would invest  5,383  in Etsy Inc on December 28, 2024 and sell it today you would lose (691.00) from holding Etsy Inc or give up 12.84% of portfolio value over 90 days.

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

Jeffs Brands  vs.  Etsy Inc

Jeffs Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jeffs Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Etsy Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Etsy Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jeffs Brands and Etsy

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

The idea behind Jeffs Brands and Etsy 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.