Correlation Between Haier Smart and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Aedas Homes 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 Aedas Homes 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 Aedas Homes SA, you can compare the effects of market volatilities on Haier Smart and Aedas Homes 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 Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Aedas Homes.
Diversification Opportunities for Haier Smart and Aedas Homes
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haier and Aedas is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA 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 Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of Haier Smart i.e., Haier Smart and Aedas Homes go up and down completely randomly.
Pair Corralation between Haier Smart and Aedas Homes
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.78 times more return on investment than Aedas Homes. However, Haier Smart Home is 1.28 times less risky than Aedas Homes. It trades about -0.08 of its potential returns per unit of risk. Aedas Homes SA is currently generating about -0.13 per unit of risk. If you would invest 177.00 in Haier Smart Home on August 28, 2024 and sell it today you would lose (5.00) from holding Haier Smart Home or give up 2.82% 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. Aedas Homes SA
Performance |
| Timeline |
| Haier Smart Home |
| Aedas Homes SA |
Haier Smart and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Aedas Homes
The main advantage of trading using opposite Haier Smart and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| Haier Smart vs. Commercial Vehicle Group | Haier Smart vs. CARSALESCOM | Haier Smart vs. DELTA AIR LINES | Haier Smart vs. ALTAIR RES 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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