Correlation Between EBay and Baozun Inc

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

Diversification Opportunities for EBay and Baozun Inc

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between EBay and Baozun is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding EBay Inc and Baozun Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc ADR and EBay 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 EBay Inc are associated (or correlated) with Baozun Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc ADR has no effect on the direction of EBay i.e., EBay and Baozun Inc go up and down completely randomly.

Pair Corralation between EBay and Baozun Inc

Given the investment horizon of 90 days EBay Inc is expected to generate 0.65 times more return on investment than Baozun Inc. However, EBay Inc is 1.54 times less risky than Baozun Inc. It trades about 0.23 of its potential returns per unit of risk. Baozun Inc ADR is currently generating about -0.06 per unit of risk. If you would invest  4,283  in EBay Inc on May 11, 2022 and sell it today you would earn a total of  478.00  from holding EBay Inc or generate 11.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

EBay Inc  vs.  Baozun Inc ADR

 Performance (%) 
       Timeline  
EBay Inc 
EBay Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in EBay Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, EBay is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

EBay Price Channel

Baozun Inc ADR 
Baozun Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Baozun Inc ADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Baozun Inc disclosed solid returns over the last few months and may actually be approaching a breakup point.

Baozun Price Channel

EBay and Baozun Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EBay and Baozun Inc

The main advantage of trading using opposite EBay and Baozun Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBay position performs unexpectedly, Baozun Inc 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 Baozun Inc will offset losses from the drop in Baozun Inc's long position.
The idea behind EBay Inc and Baozun Inc ADR 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go