Correlation Between Beyond Meat and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Beyond Meat and Hisense Home 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 Beyond Meat and Hisense Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Hisense Home Appliances, you can compare the effects of market volatilities on Beyond Meat and Hisense Home 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 Beyond Meat with a short position of Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Hisense Home.
Diversification Opportunities for Beyond Meat and Hisense Home
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beyond and Hisense is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances and Beyond Meat 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 Beyond Meat are associated (or correlated) with Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Beyond Meat i.e., Beyond Meat and Hisense Home go up and down completely randomly.
Pair Corralation between Beyond Meat and Hisense Home
Assuming the 90 days trading horizon Beyond Meat is expected to under-perform the Hisense Home. In addition to that, Beyond Meat is 1.41 times more volatile than Hisense Home Appliances. It trades about -0.17 of its total potential returns per unit of risk. Hisense Home Appliances is currently generating about -0.15 per unit of volatility. If you would invest 292.00 in Hisense Home Appliances on September 1, 2024 and sell it today you would lose (29.00) from holding Hisense Home Appliances or give up 9.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beyond Meat vs. Hisense Home Appliances
Performance |
| Timeline |
| Beyond Meat |
| Hisense Home Appliances |
Beyond Meat and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Hisense Home
The main advantage of trading using opposite Beyond Meat and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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