Correlation Between Pinduoduo and EBay
Can any of the company-specific risk be diversified away by investing in both Pinduoduo 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 Pinduoduo and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinduoduo and eBay Inc, you can compare the effects of market volatilities on Pinduoduo 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 Pinduoduo with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinduoduo and EBay.
Diversification Opportunities for Pinduoduo and EBay
Good diversification
The 3 months correlation between Pinduoduo and EBay is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pinduoduo and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Pinduoduo 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 Pinduoduo 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 Pinduoduo i.e., Pinduoduo and EBay go up and down completely randomly.
Pair Corralation between Pinduoduo and EBay
Assuming the 90 days trading horizon Pinduoduo is expected to under-perform the EBay. In addition to that, Pinduoduo is 2.84 times more volatile than eBay Inc. It trades about -0.03 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.12 per unit of volatility. If you would invest 4,967 in eBay Inc on September 26, 2024 and sell it today you would earn a total of 1,160 from holding eBay Inc or generate 23.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pinduoduo vs. eBay Inc
Performance |
Timeline |
Pinduoduo |
eBay Inc |
Pinduoduo and EBay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pinduoduo and EBay
The main advantage of trading using opposite Pinduoduo and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinduoduo 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.Pinduoduo vs. Amazon Inc | Pinduoduo vs. Amazon Inc | Pinduoduo vs. MEITUAN UNSPADR2B | Pinduoduo vs. Meituan |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |