Correlation Between Meta Platforms and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Meta Platforms 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 Meta Platforms and Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Vipshop Holdings Limited, you can compare the effects of market volatilities on Meta Platforms 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 Meta Platforms with a short position of Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Vipshop Holdings.
Diversification Opportunities for Meta Platforms and Vipshop Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meta and Vipshop is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings and Meta Platforms 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 Meta Platforms 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 Meta Platforms i.e., Meta Platforms and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Meta Platforms and Vipshop Holdings
If you would invest 16,949 in Meta Platforms on January 24, 2024 and sell it today you would earn a total of 0.00 from holding Meta Platforms or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 4.76% |
Values | Daily Returns |
Meta Platforms vs. Vipshop Holdings Limited
Performance |
Timeline |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vipshop Holdings |
Meta Platforms and Vipshop Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and Vipshop Holdings
The main advantage of trading using opposite Meta Platforms and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms 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.Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
Vipshop Holdings vs. Appian Corp | Vipshop Holdings vs. Okta Inc | Vipshop Holdings vs. MongoDB | Vipshop Holdings vs. Twilio 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 the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |