Correlation Between Secoo Holding and Newegg Commerce

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

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

Diversification Opportunities for Secoo Holding and Newegg Commerce

0.0

Correlation Coefficient

Secoo Holding  Newegg Commerce

Pay attention - limited upside

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

Pair Corralation between Secoo Holding and Newegg Commerce

If you would invest (100.00) in Secoo Holding on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Secoo Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Secoo Holding  vs.  Newegg Commerce

Secoo Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Secoo Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Secoo Holding is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Newegg Commerce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newegg Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Secoo Holding and Newegg Commerce

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

The idea behind Secoo Holding and Newegg Commerce 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.