Correlation Between Haier Smart and Albemarle
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Albemarle 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 Albemarle 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 Albemarle, you can compare the effects of market volatilities on Haier Smart and Albemarle 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 Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Albemarle.
Diversification Opportunities for Haier Smart and Albemarle
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haier and Albemarle is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle 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 Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Haier Smart i.e., Haier Smart and Albemarle go up and down completely randomly.
Pair Corralation between Haier Smart and Albemarle
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.53 times more return on investment than Albemarle. However, Haier Smart Home is 1.9 times less risky than Albemarle. It trades about 0.06 of its potential returns per unit of risk. Albemarle is currently generating about -0.02 per unit of risk. If you would invest 180.00 in Haier Smart Home on October 31, 2024 and sell it today you would earn a total of 3.00 from holding Haier Smart Home or generate 1.67% 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. Albemarle
Performance |
| Timeline |
| Haier Smart Home |
| Albemarle |
Haier Smart and Albemarle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Albemarle
The main advantage of trading using opposite Haier Smart and Albemarle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Albemarle 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 Albemarle will offset losses from the drop in Albemarle's long position.| Haier Smart vs. ARROW ELECTRONICS | Haier Smart vs. AOI Electronics Co | Haier Smart vs. STMicroelectronics NV | Haier Smart vs. United Breweries Co |
| Albemarle vs. PARKEN Sport Entertainment | Albemarle vs. Apollo Investment Corp | Albemarle vs. Guangdong Investment Limited | Albemarle vs. New Residential Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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