Correlation Between Sysco Corp and Vipshop Holdings

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

Diversification Opportunities for Sysco Corp and Vipshop Holdings

-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sysco and Vipshop is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sysco Corp and Vipshop Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Sysco Corp 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 Sysco Corp are associated (or correlated) with Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Sysco Corp i.e., Sysco Corp and Vipshop Holdings go up and down completely randomly.

Pair Corralation between Sysco Corp and Vipshop Holdings

Considering the 90-day investment horizon Sysco Corp is expected to generate 0.47 times more return on investment than Vipshop Holdings. However, Sysco Corp is 2.12 times less risky than Vipshop Holdings. It trades about 0.05 of its potential returns per unit of risk. Vipshop Holdings is currently generating about -0.02 per unit of risk. If you would invest  5,690  in Sysco Corp on April 8, 2022 and sell it today you would earn a total of  2,823  from holding Sysco Corp or generate 49.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sysco Corp  vs.  Vipshop Holdings Ltd

 Performance (%) 
      Timeline 
Sysco Corp 
Sysco Performance
0 of 100
Over the last 90 days Sysco Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sysco Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0227
Payout Ratio
0.67
Last Split Factor
2:1
Forward Annual Dividend Rate
1.96
Dividend Date
2022-07-22
Ex Dividend Date
2022-06-30
Last Split Date
2000-12-18

Sysco Price Channel

Vipshop Holdings 
Vipshop Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Vipshop Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
10:1
Last Split Date
2014-11-04

Vipshop Price Channel

Sysco Corp and Vipshop Holdings Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Sysco Corp and Vipshop Holdings

The main advantage of trading using opposite Sysco Corp and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysco Corp position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.
The idea behind Sysco Corp and Vipshop Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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