Correlation Between LightInTheBox Holding and Asset Entities

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

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

Diversification Opportunities for LightInTheBox Holding and Asset Entities

0.1

Correlation Coefficient

LightInTheBox Holding  Asset Entities

Average diversification

The 3 months correlation between LightInTheBox and Asset is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LightInTheBox Holding Co and Asset Entities Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset Entities Class and LightInTheBox 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 LightInTheBox Holding Co are associated (or correlated) with Asset Entities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset Entities Class has no effect on the direction of LightInTheBox Holding i.e., LightInTheBox Holding and Asset Entities go up and down completely randomly.

Pair Corralation between LightInTheBox Holding and Asset Entities

Given the investment horizon of 90 days LightInTheBox Holding Co is expected to generate 0.32 times more return on investment than Asset Entities. However, LightInTheBox Holding Co is 3.09 times less risky than Asset Entities. It trades about 0.03 of its potential returns per unit of risk. Asset Entities Class is currently generating about -0.01 per unit of risk. If you would invest  121.00  in LightInTheBox Holding Co on May 21, 2025 and sell it today you would earn a total of  1.00  from holding LightInTheBox Holding Co or generate 0.83% return on investment over 90 days.

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

LightInTheBox Holding Co  vs.  Asset Entities Class

LightInTheBox Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LightInTheBox Holding Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LightInTheBox Holding may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Asset Entities Class

Risk-Adjusted Performance

Weakest

Over the last 90 days Asset Entities Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with LightInTheBox Holding and Asset Entities

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

The idea behind LightInTheBox Holding Co and Asset Entities Class 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.