Correlation Between Secoo Holding and Jowell Global

Can any of the company-specific risk be diversified away by investing in both Secoo Holding and Jowell Global 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 Secoo Holding and Jowell Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Secoo Holding and Jowell Global, you can compare the effects of market volatilities on Secoo Holding and Jowell Global 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 Secoo Holding with a short position of Jowell Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secoo Holding and Jowell Global.

Diversification Opportunities for Secoo Holding and Jowell Global

-0.23

Correlation Coefficient

Secoo Holding  Jowell Global

Very good diversification

The 3 months correlation between Secoo and Jowell is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Secoo Holding and Jowell Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jowell Global and Secoo Holding 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 Secoo Holding are associated (or correlated) with Jowell Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jowell Global has no effect on the direction of Secoo Holding i.e., Secoo Holding and Jowell Global go up and down completely randomly.

Pair Corralation between Secoo Holding and Jowell Global

Given the investment horizon of 90 days Secoo Holding is expected to generate 1.6 times more return on investment than Jowell Global. However, Secoo Holding is 1.6 times more volatile than Jowell Global. It trades about 0.03 of its potential returns per unit of risk. Jowell Global is currently generating about 0.03 per unit of risk. If you would invest  198.00  in Secoo Holding on August 30, 2024 and sell it today you would lose (115.00) from holding Secoo Holding or give up 58.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.63%
Values	Daily Returns

Secoo Holding  vs.  Jowell Global

Secoo Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Secoo Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Secoo Holding is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Jowell Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jowell Global are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Jowell Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Secoo Holding and Jowell Global

The main advantage of trading using opposite Secoo Holding and Jowell Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secoo Holding position performs unexpectedly, Jowell Global 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 Jowell Global will offset losses from the drop in Jowell Global's long position.

The idea behind Secoo Holding and Jowell Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.