Correlation Between Haier Smart and SIDETRADE
Can any of the company-specific risk be diversified away by investing in both Haier Smart and SIDETRADE 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 SIDETRADE 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 SIDETRADE EO 1, you can compare the effects of market volatilities on Haier Smart and SIDETRADE 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 SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and SIDETRADE.
Diversification Opportunities for Haier Smart and SIDETRADE
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haier and SIDETRADE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 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 SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of Haier Smart i.e., Haier Smart and SIDETRADE go up and down completely randomly.
Pair Corralation between Haier Smart and SIDETRADE
Assuming the 90 days trading horizon Haier Smart is expected to generate 1.09 times less return on investment than SIDETRADE. But when comparing it to its historical volatility, Haier Smart Home is 1.25 times less risky than SIDETRADE. It trades about 0.08 of its potential returns per unit of risk. SIDETRADE EO 1 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18,500 in SIDETRADE EO 1 on September 3, 2024 and sell it today you would earn a total of 3,600 from holding SIDETRADE EO 1 or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. SIDETRADE EO 1
Performance |
| Timeline |
| Haier Smart Home |
| SIDETRADE EO 1 |
Haier Smart and SIDETRADE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and SIDETRADE
The main advantage of trading using opposite Haier Smart and SIDETRADE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, SIDETRADE 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 SIDETRADE will offset losses from the drop in SIDETRADE's long position.| Haier Smart vs. Sixt Leasing SE | Haier Smart vs. ALGOMA STEEL GROUP | Haier Smart vs. Tianjin Capital Environmental | Haier Smart vs. Perma Fix Environmental Services |
| SIDETRADE vs. PSI Software AG | SIDETRADE vs. Consolidated Communications Holdings | SIDETRADE vs. BW OFFSHORE LTD | SIDETRADE vs. Citic Telecom International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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