Correlation Between Spectrum Brands and Vipshop Holdings

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

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

Diversification Opportunities for Spectrum Brands and Vipshop Holdings

0.35
  Correlation Coefficient
Spectrum Brands Hold
Vipshop Holdings

Weak diversification

The 3 months correlation between Spectrum and Vipshop is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings Inc and Vipshop Holdings Limited in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Spectrum Brands 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 Spectrum Brands 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 Spectrum Brands i.e. Spectrum Brands and Vipshop Holdings go up and down completely randomly.

Pair Corralation between Spectrum Brands and Vipshop Holdings

Considering the 30-days investment horizon, Spectrum Brands Holdings is expected to generate 0.95 times more return on investment than Vipshop Holdings. However, Spectrum Brands Holdings is 1.05 times less risky than Vipshop Holdings. It trades about 0.12 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about 0.11 per unit of risk. If you would invest  3,633  in Spectrum Brands Holdings on June 14, 2020 and sell it today you would earn a total of  918.00  from holding Spectrum Brands Holdings or generate 25.27% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Spectrum Brands Holdings Inc  vs.  Vipshop Holdings Limited

 Performance (%) 
      Timeline 
Spectrum Brands Hold 
88

Spectrum Brands Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Brands Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days. Despite somewhat weak basic indicators, Spectrum Brands sustained solid returns over the last few months and may actually be approaching a breakup point.
Vipshop Holdings 
77

Vipshop Holdings Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings Limited are ranked lower than 7 (%) 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.

Spectrum Brands and Vipshop Holdings Volatility Contrast

 Predicted Return Density 
      Returns 
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