Correlation Between Baozun and Twin Hospitality
Can any of the company-specific risk be diversified away by investing in both Baozun and Twin Hospitality 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 Baozun and Twin Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baozun Inc and Twin Hospitality Group, you can compare the effects of market volatilities on Baozun and Twin Hospitality 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 Baozun with a short position of Twin Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baozun and Twin Hospitality.
Diversification Opportunities for Baozun and Twin Hospitality
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baozun and Twin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Twin Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Hospitality and Baozun 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 Baozun Inc are associated (or correlated) with Twin Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Hospitality has no effect on the direction of Baozun i.e., Baozun and Twin Hospitality go up and down completely randomly.
Pair Corralation between Baozun and Twin Hospitality
Given the investment horizon of 90 days Baozun Inc is expected to generate 0.38 times more return on investment than Twin Hospitality. However, Baozun Inc is 2.64 times less risky than Twin Hospitality. It trades about -0.13 of its potential returns per unit of risk. Twin Hospitality Group is currently generating about -0.32 per unit of risk. If you would invest 374.00 in Baozun Inc on October 7, 2025 and sell it today you would lose (88.00) from holding Baozun Inc or give up 23.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baozun Inc vs. Twin Hospitality Group
Performance |
| Timeline |
| Baozun Inc |
| Twin Hospitality |
Baozun and Twin Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baozun and Twin Hospitality
The main advantage of trading using opposite Baozun and Twin Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun position performs unexpectedly, Twin Hospitality 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 Twin Hospitality will offset losses from the drop in Twin Hospitality's long position.The idea behind Baozun Inc and Twin Hospitality Group 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.| Twin Hospitality vs. RCI Hospitality Holdings | Twin Hospitality vs. Dennys Corp | Twin Hospitality vs. Aptera Motors Corp | Twin Hospitality vs. Xponential Fitness |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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