Correlation Between Blue Apron and Etsy

By analyzing existing cross correlation between Blue Apron Holdings and Etsy Inc, you can compare the effects of market volatilities on Blue Apron and Etsy 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 Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Apron and Etsy.

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

Diversification Opportunities for Blue Apron and Etsy

0.51
  Correlation Coefficient
Blue Apron Holdings
Etsy Inc

Very weak diversification

The 3 months correlation between Blue Apron and Etsy is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings and Etsy Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc 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 Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Blue Apron i.e., Blue Apron and Etsy go up and down completely randomly.

Pair Corralation between Blue Apron and Etsy

Given the investment horizon of 90 days Blue Apron Holdings is expected to generate 2.58 times more return on investment than Etsy. However, Blue Apron is 2.58 times more volatile than Etsy Inc. It trades about 0.05 of its potential returns per unit of risk. Etsy Inc is currently generating about 0.08 per unit of risk. If you would invest  428.00  in Blue Apron Holdings on October 20, 2021 and sell it today you would earn a total of  311.00  from holding Blue Apron Holdings or generate 72.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Blue Apron Holdings  vs.  Etsy Inc

 Performance (%) 
      Timeline 
Blue Apron Holdings 
Blue Apron Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Apron Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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

Etsy Inc 
Etsy Performance
0 of 100
Over the last 90 days Etsy Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Etsy Price Channel

Blue Apron and Etsy Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Blue Apron and Etsy

The main advantage of trading using opposite Blue Apron and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy's long position.
The idea behind Blue Apron Holdings and Etsy Inc 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 CEO Directory module to screen CEOs from public companies around the world.

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