Correlation Between Haier Smart and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Haier Smart and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Zoom Video.
Diversification Opportunities for Haier Smart and Zoom Video
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Haier and Zoom is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Haier Smart i.e., Haier Smart and Zoom Video go up and down completely randomly.
Pair Corralation between Haier Smart and Zoom Video
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.9 times more return on investment than Zoom Video. However, Haier Smart Home is 1.12 times less risky than Zoom Video. It trades about 0.09 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.07 per unit of risk. If you would invest 111.00 in Haier Smart Home on September 14, 2024 and sell it today you would earn a total of 60.00 from holding Haier Smart Home or generate 54.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Zoom Video Communications
Performance |
| Timeline |
| Haier Smart Home |
| Zoom Video Communications |
Haier Smart and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Zoom Video
The main advantage of trading using opposite Haier Smart and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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