Correlation Between Boqii Holding and Etsy

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

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

Diversification Opportunities for Boqii Holding and Etsy

-0.62

Correlation Coefficient

Boqii Holding  Etsy

Excellent diversification

The 3 months correlation between Boqii and Etsy is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc and Boqii 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 Boqii Holding Limited are associated (or correlated) with Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Boqii Holding i.e., Boqii Holding and Etsy go up and down completely randomly.

Pair Corralation between Boqii Holding and Etsy

Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to under-perform the Etsy. In addition to that, Boqii Holding is 1.51 times more volatile than Etsy Inc. It trades about -0.59 of its total potential returns per unit of risk. Etsy Inc is currently generating about 0.16 per unit of volatility. If you would invest  5,230  in Etsy Inc on September 23, 2024 and sell it today you would earn a total of  451.00  from holding Etsy Inc or generate 8.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Boqii Holding Limited  vs.  Etsy Inc

Boqii Holding Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boqii Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Boqii Holding is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Etsy Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Etsy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boqii Holding and Etsy

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

The idea behind Boqii Holding Limited and Etsy Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.