Correlation Between Wayfair and Jowell Global

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

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

Diversification Opportunities for Wayfair and Jowell Global

-0.18

Correlation Coefficient

Wayfair  Jowell Global

Good diversification

The 3 months correlation between Wayfair and Jowell is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wayfair and Jowell Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jowell Global and Wayfair 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 Wayfair are associated (or correlated) with Jowell Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jowell Global has no effect on the direction of Wayfair i.e., Wayfair and Jowell Global go up and down completely randomly.

Pair Corralation between Wayfair and Jowell Global

Taking into account the 90-day investment horizon Wayfair is expected to generate 0.5 times more return on investment than Jowell Global. However, Wayfair is 2.01 times less risky than Jowell Global. It trades about 0.0 of its potential returns per unit of risk. Jowell Global is currently generating about -0.13 per unit of risk. If you would invest  4,530  in Wayfair on September 27, 2024 and sell it today you would lose (55.00) from holding Wayfair or give up 1.21% of portfolio value over 90 days.

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

Wayfair  vs.  Jowell Global

Wayfair

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wayfair has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Jowell Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jowell Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Jowell Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wayfair and Jowell Global

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

The idea behind Wayfair and Jowell Global 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.