Correlation Between Sally Beauty and Vipshop Holdings

By analyzing existing cross correlation between Sally Beauty Holdings and Vipshop Holdings Limited, you can compare the effects of market volatilities on Sally Beauty 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 Sally Beauty with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sally Beauty and Vipshop Holdings.

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

Diversification Opportunities for Sally Beauty and Vipshop Holdings

0.4
  Correlation Coefficient
Sally Beauty Holdings
Vipshop Holdings

Very weak diversification

The 3 months correlation between Sally and Vipshop is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sally Beauty Holdings Inc Na and Vipshop Holdings Limited in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Sally Beauty 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 Sally Beauty Holdings 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 Sally Beauty i.e. Sally Beauty and Vipshop Holdings go up and down completely randomly.

Pair Corralation between Sally Beauty and Vipshop Holdings

Considering the 30-days investment horizon, Sally Beauty Holdings is expected to generate 1.31 times more return on investment than Vipshop Holdings. However, Sally Beauty is 1.31 times more volatile than Vipshop Holdings Limited. It trades about 0.22 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about 0.07 per unit of risk. If you would invest  731.00  in Sally Beauty Holdings on June 15, 2020 and sell it today you would earn a total of  633.00  from holding Sally Beauty Holdings or generate 86.59% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sally Beauty Holdings Inc Na  vs.  Vipshop Holdings Limited

 Performance (%) 
      Timeline 
Sally Beauty Holdings 
1515

Sally Beauty Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Sally Beauty Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 30 days. Despite nearly weak basic indicators, Sally Beauty layed out solid returns over the last few months and may actually be approaching a breakup point.
Vipshop Holdings 
44

Vipshop Holdings Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 30 days. In defiance of relatively weak technical indicators, Vipshop Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Sally Beauty and Vipshop Holdings Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Theme Ratings module to determine theme ratings based on digital equity recommendations. macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.


 
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