Correlation Between Jumia Technologies and CarPartsCom

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

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

Diversification Opportunities for Jumia Technologies and CarPartsCom

0.4

Correlation Coefficient

Jumia Technologies  CarPartsCom

Very weak diversification

The 3 months correlation between Jumia and CarPartsCom is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jumia Technologies AG and CarPartsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarPartsCom and Jumia Technologies 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 Jumia Technologies AG are associated (or correlated) with CarPartsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarPartsCom has no effect on the direction of Jumia Technologies i.e., Jumia Technologies and CarPartsCom go up and down completely randomly.

Pair Corralation between Jumia Technologies and CarPartsCom

Given the investment horizon of 90 days Jumia Technologies AG is expected to under-perform the CarPartsCom. But the stock apears to be less risky and, when comparing its historical volatility, Jumia Technologies AG is 1.49 times less risky than CarPartsCom. The stock trades about -0.16 of its potential returns per unit of risk. The CarPartsCom is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  102.00  in CarPartsCom on December 30, 2024 and sell it today you would lose (11.00) from holding CarPartsCom or give up 10.78% of portfolio value over 90 days.

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

Jumia Technologies AG  vs.  CarPartsCom

Jumia Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jumia Technologies AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CarPartsCom

Risk-Adjusted Performance

Very Weak

Over the last 90 days CarPartsCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CarPartsCom is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jumia Technologies and CarPartsCom

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

The idea behind Jumia Technologies AG and CarPartsCom 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.