Correlation Between Wayfair and ECARX Holdings

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

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

Diversification Opportunities for Wayfair and ECARX Holdings

0.38

Correlation Coefficient

Wayfair  ECARX Holdings

Weak diversification

The 3 months correlation between Wayfair and ECARX is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wayfair and ECARX Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Class and Wayfair 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 Wayfair are associated (or correlated) with ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Class has no effect on the direction of Wayfair i.e., Wayfair and ECARX Holdings go up and down completely randomly.

Pair Corralation between Wayfair and ECARX Holdings

Taking into account the 90-day investment horizon Wayfair is expected to generate 0.58 times more return on investment than ECARX Holdings. However, Wayfair is 1.72 times less risky than ECARX Holdings. It trades about 0.31 of its potential returns per unit of risk. ECARX Holdings Class is currently generating about 0.07 per unit of risk. If you would invest  3,092  in Wayfair on May 4, 2025 and sell it today you would earn a total of  3,430  from holding Wayfair or generate 110.93% return on investment over 90 days.

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

Wayfair  vs.  ECARX Holdings Class

Wayfair

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wayfair are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Wayfair showed solid returns over the last few months and may actually be approaching a breakup point.

ECARX Holdings Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ECARX Holdings Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ECARX Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wayfair and ECARX Holdings

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

The idea behind Wayfair and ECARX Holdings 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 Commodity Directory module to find actively traded commodities issued by global exchanges.