Correlation Between Vipshop Holdings and WISH Old

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

By analyzing existing cross correlation between Vipshop Holdings Limited and WISH Old, you can compare the effects of market volatilities on Vipshop Holdings and WISH Old 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 Vipshop Holdings with a short position of WISH Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and WISH Old.

Diversification Opportunities for Vipshop Holdings and WISH Old

0.0

Correlation Coefficient

Vipshop Holdings  WISH Old

Pay attention - limited upside

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

Pair Corralation between Vipshop Holdings and WISH Old

If you would invest  1,427  in Vipshop Holdings Limited on December 1, 2024 and sell it today you would earn a total of  145.00  from holding Vipshop Holdings Limited or generate 10.16% return on investment over 90 days.

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

Vipshop Holdings Limited  vs.  WISH Old

Vipshop Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Vipshop Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

WISH Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days WISH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, WISH Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Vipshop Holdings and WISH Old

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

The idea behind Vipshop Holdings Limited and WISH Old 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..