Correlation Between Qurate Retail and Jumia Technologies

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

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

Diversification Opportunities for Qurate Retail and Jumia Technologies

0.25

Correlation Coefficient

Qurate Retail  Jumia Technologies

Modest diversification

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

Pair Corralation between Qurate Retail and Jumia Technologies

Assuming the 90 days horizon Qurate Retail is expected to generate 0.5 times more return on investment than Jumia Technologies. However, Qurate Retail is 1.98 times less risky than Jumia Technologies. It trades about 0.03 of its potential returns per unit of risk. Jumia Technologies AG is currently generating about -0.03 per unit of risk. If you would invest  3,974  in Qurate Retail on September 3, 2024 and sell it today you would earn a total of  86.00  from holding Qurate Retail or generate 2.16% return on investment over 90 days.

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

Qurate Retail  vs.  Jumia Technologies AG

Qurate Retail

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qurate Retail are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Qurate Retail is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Jumia Technologies

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's forward 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 Qurate Retail and Jumia Technologies

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

The idea behind Qurate Retail and Jumia Technologies AG 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 CEOs Directory module to screen CEOs from public companies around the world.