Correlation Between Haier Smart and REDSUN PROPERTIES
Can any of the company-specific risk be diversified away by investing in both Haier Smart and REDSUN PROPERTIES 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 Haier Smart and REDSUN PROPERTIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and REDSUN PROPERTIES GROUP, you can compare the effects of market volatilities on Haier Smart and REDSUN PROPERTIES 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 Haier Smart with a short position of REDSUN PROPERTIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and REDSUN PROPERTIES.
Diversification Opportunities for Haier Smart and REDSUN PROPERTIES
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haier and REDSUN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and REDSUN PROPERTIES GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDSUN PROPERTIES and Haier Smart 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 Haier Smart Home are associated (or correlated) with REDSUN PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDSUN PROPERTIES has no effect on the direction of Haier Smart i.e., Haier Smart and REDSUN PROPERTIES go up and down completely randomly.
Pair Corralation between Haier Smart and REDSUN PROPERTIES
Assuming the 90 days trading horizon Haier Smart is expected to generate 16.91 times less return on investment than REDSUN PROPERTIES. But when comparing it to its historical volatility, Haier Smart Home is 16.43 times less risky than REDSUN PROPERTIES. It trades about 0.09 of its potential returns per unit of risk. REDSUN PROPERTIES GROUP is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.00 in REDSUN PROPERTIES GROUP on September 14, 2024 and sell it today you would lose (0.70) from holding REDSUN PROPERTIES GROUP or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. REDSUN PROPERTIES GROUP
Performance |
| Timeline |
| Haier Smart Home |
| REDSUN PROPERTIES |
Haier Smart and REDSUN PROPERTIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and REDSUN PROPERTIES
The main advantage of trading using opposite Haier Smart and REDSUN PROPERTIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, REDSUN PROPERTIES 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 REDSUN PROPERTIES will offset losses from the drop in REDSUN PROPERTIES's long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
| REDSUN PROPERTIES vs. HomeToGo SE | REDSUN PROPERTIES vs. Infrastrutture Wireless Italiane | REDSUN PROPERTIES vs. Haier Smart Home | REDSUN PROPERTIES vs. American Homes 4 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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