Correlation Between Haier Smart and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals Plc, you can compare the effects of market volatilities on Haier Smart and Adriatic Metals 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 Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Adriatic Metals.
Diversification Opportunities for Haier Smart and Adriatic Metals
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haier and Adriatic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Adriatic Metals Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals Plc 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 Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals Plc has no effect on the direction of Haier Smart i.e., Haier Smart and Adriatic Metals go up and down completely randomly.
Pair Corralation between Haier Smart and Adriatic Metals
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.5 times more return on investment than Adriatic Metals. However, Haier Smart Home is 2.0 times less risky than Adriatic Metals. It trades about 0.1 of its potential returns per unit of risk. Adriatic Metals Plc is currently generating about 0.04 per unit of risk. If you would invest 111.00 in Haier Smart Home on September 15, 2024 and sell it today you would earn a total of 64.00 from holding Haier Smart Home or generate 57.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.27% |
| Values | Daily Returns |
Haier Smart Home vs. Adriatic Metals Plc
Performance |
| Timeline |
| Haier Smart Home |
| Adriatic Metals Plc |
Haier Smart and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Adriatic Metals
The main advantage of trading using opposite Haier Smart and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
| Adriatic Metals vs. Summit Materials | Adriatic Metals vs. Haier Smart Home | Adriatic Metals vs. Hyster Yale Materials Handling | Adriatic Metals vs. APPLIED MATERIALS |
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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