Correlation Between Vipshop Holdings and Educational Development

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

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

Diversification Opportunities for Vipshop Holdings and Educational Development

0.41

Correlation Coefficient

Vipshop Holdings  Educational Development

Very weak diversification

The 3 months correlation between Vipshop and Educational is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Educational Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Educational Development and Vipshop Holdings 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 Vipshop Holdings Limited are associated (or correlated) with Educational Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Educational Development has no effect on the direction of Vipshop Holdings i.e., Vipshop Holdings and Educational Development go up and down completely randomly.

Pair Corralation between Vipshop Holdings and Educational Development

Given the investment horizon of 90 days Vipshop Holdings Limited is expected to generate 0.83 times more return on investment than Educational Development. However, Vipshop Holdings Limited is 1.21 times less risky than Educational Development. It trades about 0.09 of its potential returns per unit of risk. Educational Development is currently generating about 0.06 per unit of risk. If you would invest  1,355  in Vipshop Holdings Limited on May 1, 2025 and sell it today you would earn a total of  153.00  from holding Vipshop Holdings Limited or generate 11.29% return on investment over 90 days.

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

Vipshop Holdings Limited  vs.  Educational Development

Vipshop Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Vipshop Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Educational Development

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Educational Development are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Educational Development may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vipshop Holdings and Educational Development

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

The idea behind Vipshop Holdings Limited and Educational Development 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.