Correlation Between Ideanomics and Etsy

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

Diversification Opportunities for Ideanomics and Etsy

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Ideanomics and Etsy is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc and Ideanomics 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 Ideanomics 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 Ideanomics i.e., Ideanomics and Etsy go up and down completely randomly.

Pair Corralation between Ideanomics and Etsy

Given the investment horizon of 90 days Ideanomics is expected to under-perform the Etsy. In addition to that, Ideanomics is 1.25 times more volatile than Etsy Inc. It trades about -0.85 of its total potential returns per unit of risk. Etsy Inc is currently generating about 0.03 per unit of volatility. If you would invest  10,386  in Etsy Inc on July 6, 2022 and sell it today you would earn a total of  113.00  from holding Etsy Inc or generate 1.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ideanomics  vs.  Etsy Inc

 Performance (%) 
       Timeline  
Ideanomics 
Ideanomics Performance
0 of 100
Over the last 90 days Ideanomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Ideanomics Price Channel

Etsy Inc 
Etsy Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Etsy showed solid returns over the last few months and may actually be approaching a breakup point.

Etsy Price Channel

Ideanomics and Etsy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ideanomics and Etsy

The main advantage of trading using opposite Ideanomics and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ideanomics 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.
Ideanomics vs. Amazon Inc
The idea behind Ideanomics 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.
Etsy vs. Amazon Inc
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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