Correlation Between Blue Apron and 1stdibs

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Can any of the company-specific risk be diversified away by investing in both Blue Apron and 1stdibs 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 Blue Apron and 1stdibs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Apron Holdings and 1stdibs, you can compare the effects of market volatilities on Blue Apron and 1stdibs 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 Blue Apron with a short position of 1stdibs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Apron and 1stdibs.

Diversification Opportunities for Blue Apron and 1stdibs

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Blue Apron and 1stdibs is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings and 1stdibs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1stdibs and Blue Apron 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 Blue Apron Holdings are associated (or correlated) with 1stdibs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1stdibs has no effect on the direction of Blue Apron i.e., Blue Apron and 1stdibs go up and down completely randomly.

Pair Corralation between Blue Apron and 1stdibs

Given the investment horizon of 90 days Blue Apron Holdings is expected to generate 1.44 times more return on investment than 1stdibs. However, Blue Apron is 1.44 times more volatile than 1stdibs. It trades about 0.08 of its potential returns per unit of risk. 1stdibs is currently generating about 0.07 per unit of risk. If you would invest  265.00  in Blue Apron Holdings on May 10, 2022 and sell it today you would earn a total of  33.00  from holding Blue Apron Holdings or generate 12.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Blue Apron Holdings  vs.  1stdibs

 Performance (%) 
       Timeline  
Blue Apron Holdings 
Blue Apron Performance
0 of 100
Over the last 90 days Blue Apron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Blue Apron is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Blue Apron Price Channel

1stdibs 
1stdibs Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in 1stdibs are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, 1stdibs reported solid returns over the last few months and may actually be approaching a breakup point.

1stdibs Price Channel

Blue Apron and 1stdibs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blue Apron and 1stdibs

The main advantage of trading using opposite Blue Apron and 1stdibs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron position performs unexpectedly, 1stdibs 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 1stdibs will offset losses from the drop in 1stdibs' long position.
The idea behind Blue Apron Holdings and 1stdibs 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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