Correlation Between Chewy and EBay

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Chewy and EBay 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 Chewy and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chewy Inc and EBay Inc, you can compare the effects of market volatilities on Chewy and EBay 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 Chewy with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chewy and EBay.

Diversification Opportunities for Chewy and EBay

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Chewy and EBay is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chewy Inc and EBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBay Inc and Chewy 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 Chewy Inc are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBay Inc has no effect on the direction of Chewy i.e., Chewy and EBay go up and down completely randomly.

Pair Corralation between Chewy and EBay

Given the investment horizon of 90 days Chewy Inc is expected to under-perform the EBay. In addition to that, Chewy is 1.97 times more volatile than EBay Inc. It trades about -0.2 of its total potential returns per unit of risk. EBay Inc is currently generating about -0.24 per unit of volatility. If you would invest  5,363  in EBay Inc on February 23, 2022 and sell it today you would lose (932.00)  from holding EBay Inc or give up 17.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Chewy Inc  vs.  EBay Inc

 Performance (%) 
      Timeline 
Chewy Inc 
Chewy Performance
0 of 100
Over the last 90 days Chewy 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 June 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Chewy Price Channel

EBay Inc 
EBay Performance
0 of 100
Over the last 90 days EBay 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 June 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

EBay Price Channel

Chewy and EBay Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Chewy and EBay

The main advantage of trading using opposite Chewy and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chewy position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
The idea behind Chewy Inc and EBay 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go