Correlation Between Fiverr International and EBay
Can any of the company-specific risk be diversified away by investing in both Fiverr International and EBay 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 Fiverr International and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiverr International and eBay Inc, you can compare the effects of market volatilities on Fiverr International and EBay 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 Fiverr International with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiverr International and EBay.
Diversification Opportunities for Fiverr International and EBay
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fiverr and EBay is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Fiverr International 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 Fiverr International are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Fiverr International i.e., Fiverr International and EBay go up and down completely randomly.
Pair Corralation between Fiverr International and EBay
Given the investment horizon of 90 days Fiverr International is expected to generate 2.84 times more return on investment than EBay. However, Fiverr International is 2.84 times more volatile than eBay Inc. It trades about 0.04 of its potential returns per unit of risk. eBay Inc is currently generating about 0.05 per unit of risk. If you would invest 2,081 in Fiverr International on January 31, 2024 and sell it today you would earn a total of 30.00 from holding Fiverr International or generate 1.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fiverr International vs. eBay Inc
Performance |
Timeline |
Fiverr International |
eBay Inc |
Fiverr International and EBay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fiverr International and EBay
The main advantage of trading using opposite Fiverr International and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.Fiverr International vs. Qurate Retail | Fiverr International vs. Natural Health Trend | Fiverr International vs. iPower 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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