Correlation Between Haier Smart and INVITATION HOMES
Can any of the company-specific risk be diversified away by investing in both Haier Smart and INVITATION 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 INVITATION 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 INVITATION HOMES DL, you can compare the effects of market volatilities on Haier Smart and INVITATION 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 INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and INVITATION HOMES.
Diversification Opportunities for Haier Smart and INVITATION HOMES
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and INVITATION is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES 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 INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of Haier Smart i.e., Haier Smart and INVITATION HOMES go up and down completely randomly.
Pair Corralation between Haier Smart and INVITATION HOMES
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 1.55 times more return on investment than INVITATION HOMES. However, Haier Smart is 1.55 times more volatile than INVITATION HOMES DL. It trades about 0.15 of its potential returns per unit of risk. INVITATION HOMES DL is currently generating about 0.14 per unit of risk. 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 |
Haier Smart Home vs. INVITATION HOMES DL
Performance |
| Timeline |
| Haier Smart Home |
| INVITATION HOMES |
Haier Smart and INVITATION HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and INVITATION HOMES
The main advantage of trading using opposite Haier Smart and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, INVITATION 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES's long position.| 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 |
| INVITATION HOMES vs. InPlay Oil Corp | INVITATION HOMES vs. The Hanover Insurance | INVITATION HOMES vs. PANIN INSURANCE | INVITATION HOMES vs. Sabre Insurance Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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