Correlation Between EVS Broadcast and Haier Smart
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast 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 EVS Broadcast and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and Haier Smart Home, you can compare the effects of market volatilities on EVS Broadcast 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 EVS Broadcast with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Haier Smart.
Diversification Opportunities for EVS Broadcast and Haier Smart
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EVS and Haier is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment 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 EVS Broadcast 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 EVS Broadcast Equipment 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 EVS Broadcast i.e., EVS Broadcast and Haier Smart go up and down completely randomly.
Pair Corralation between EVS Broadcast and Haier Smart
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.92 times more return on investment than Haier Smart. However, EVS Broadcast Equipment is 1.09 times less risky than Haier Smart. It trades about 0.02 of its potential returns per unit of risk. Haier Smart Home is currently generating about -0.01 per unit of risk. If you would invest 2,839 in EVS Broadcast Equipment on August 25, 2024 and sell it today you would earn a total of 11.00 from holding EVS Broadcast Equipment or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Haier Smart Home
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Haier Smart Home |
EVS Broadcast and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Haier Smart
The main advantage of trading using opposite EVS Broadcast and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast 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.| EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc |
| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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