Correlation Between Haier Smart and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Haier Smart and EVS Broadcast 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 EVS Broadcast 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 EVS Broadcast Equipment, you can compare the effects of market volatilities on Haier Smart and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and EVS Broadcast.
Diversification Opportunities for Haier Smart and EVS Broadcast
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haier and EVS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Haier Smart i.e., Haier Smart and EVS Broadcast go up and down completely randomly.
Pair Corralation between Haier Smart and EVS Broadcast
Assuming the 90 days trading horizon Haier Smart Home is expected to under-perform the EVS Broadcast. In addition to that, Haier Smart is 1.01 times more volatile than EVS Broadcast Equipment. It trades about -0.08 of its total potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.07 per unit of volatility. If you would invest 2,864 in EVS Broadcast Equipment on August 28, 2024 and sell it today you would earn a total of 61.00 from holding EVS Broadcast Equipment or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Haier Smart Home |
| EVS Broadcast Equipment |
Haier Smart and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and EVS Broadcast
The main advantage of trading using opposite Haier Smart and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| Haier Smart vs. Commercial Vehicle Group | Haier Smart vs. CARSALESCOM | Haier Smart vs. DELTA AIR LINES | Haier Smart vs. ALTAIR RES INC |
| EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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