Correlation Between Secoo Holding and Natural Health

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

By analyzing existing cross correlation between Secoo Holding and Natural Health Trend, you can compare the effects of market volatilities on Secoo Holding and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secoo Holding and Natural Health.

Diversification Opportunities for Secoo Holding and Natural Health

0.0

Correlation Coefficient

Secoo Holding  Natural Health

Pay attention - limited upside

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

Pair Corralation between Secoo Holding and Natural Health

If you would invest  435.00  in Natural Health Trend on December 28, 2024 and sell it today you would earn a total of  66.00  from holding Natural Health Trend or generate 15.17% return on investment over 90 days.

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

Secoo Holding  vs.  Natural Health Trend

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.

Natural Health Trend

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Natural Health Trend are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Natural Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Secoo Holding and Natural Health

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

The idea behind Secoo Holding and Natural Health Trend 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.