Correlation Between Haier Smart and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both Haier Smart and GAMING FAC 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 GAMING FAC 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 GAMING FAC SA, you can compare the effects of market volatilities on Haier Smart and GAMING FAC 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 GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and GAMING FAC.
Diversification Opportunities for Haier Smart and GAMING FAC
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haier and GAMING is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA 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 GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of Haier Smart i.e., Haier Smart and GAMING FAC go up and down completely randomly.
Pair Corralation between Haier Smart and GAMING FAC
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.54 times more return on investment than GAMING FAC. However, Haier Smart Home is 1.84 times less risky than GAMING FAC. It trades about 0.07 of its potential returns per unit of risk. GAMING FAC SA is currently generating about 0.03 per unit of risk. If you would invest 98.00 in Haier Smart Home on September 3, 2024 and sell it today you would earn a total of 78.00 from holding Haier Smart Home or generate 79.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. GAMING FAC SA
Performance |
| Timeline |
| Haier Smart Home |
| GAMING FAC SA |
Haier Smart and GAMING FAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and GAMING FAC
The main advantage of trading using opposite Haier Smart and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC'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 |
| GAMING FAC vs. Nintendo Co | GAMING FAC vs. Nintendo Co | GAMING FAC vs. Sea Limited | GAMING FAC vs. Take Two Interactive Software |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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