Correlation Between INVITATION HOMES and Haier Smart
Can any of the company-specific risk be diversified away by investing in both INVITATION HOMES and Haier Smart 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 INVITATION HOMES and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVITATION HOMES DL and Haier Smart Home, you can compare the effects of market volatilities on INVITATION HOMES and Haier Smart 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 INVITATION HOMES with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVITATION HOMES and Haier Smart.
Diversification Opportunities for INVITATION HOMES and Haier Smart
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INVITATION and Haier is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding INVITATION HOMES DL and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and INVITATION HOMES 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 INVITATION HOMES DL are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of INVITATION HOMES i.e., INVITATION HOMES and Haier Smart go up and down completely randomly.
Pair Corralation between INVITATION HOMES and Haier Smart
Assuming the 90 days horizon INVITATION HOMES is expected to generate 1.67 times less return on investment than Haier Smart. But when comparing it to its historical volatility, INVITATION HOMES DL is 1.55 times less risky than Haier Smart. It trades about 0.14 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Haier Smart Home on November 29, 2024 and sell it today you would earn a total of 8.00 from holding Haier Smart Home or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INVITATION HOMES DL vs. Haier Smart Home
Performance |
| Timeline |
| INVITATION HOMES |
| Haier Smart Home |
INVITATION HOMES and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVITATION HOMES and Haier Smart
The main advantage of trading using opposite INVITATION HOMES and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVITATION HOMES position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| INVITATION HOMES vs. InPlay Oil Corp | INVITATION HOMES vs. The Hanover Insurance | INVITATION HOMES vs. PANIN INSURANCE | INVITATION HOMES vs. Sabre Insurance Group |
| Haier Smart vs. Comba Telecom Systems | Haier Smart vs. COMBA TELECOM SYST | Haier Smart vs. Take Two Interactive Software | Haier Smart vs. FORMPIPE SOFTWARE AB |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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