Correlation Between Haier Smart and CVB Financial
Can any of the company-specific risk be diversified away by investing in both Haier Smart and CVB Financial 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 CVB Financial 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 CVB Financial Corp, you can compare the effects of market volatilities on Haier Smart and CVB Financial 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 CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and CVB Financial.
Diversification Opportunities for Haier Smart and CVB Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and CVB is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp 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 CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of Haier Smart i.e., Haier Smart and CVB Financial go up and down completely randomly.
Pair Corralation between Haier Smart and CVB Financial
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.55 times more return on investment than CVB Financial. However, Haier Smart Home is 1.82 times less risky than CVB Financial. It trades about -0.02 of its potential returns per unit of risk. CVB Financial Corp is currently generating about -0.21 per unit of risk. If you would invest 175.00 in Haier Smart Home on October 16, 2024 and sell it today you would lose (1.00) from holding Haier Smart Home or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. CVB Financial Corp
Performance |
| Timeline |
| Haier Smart Home |
| CVB Financial Corp |
Haier Smart and CVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and CVB Financial
The main advantage of trading using opposite Haier Smart and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, CVB Financial 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 CVB Financial will offset losses from the drop in CVB Financial's long position.| Haier Smart vs. Magic Software Enterprises | Haier Smart vs. Kingdee International Software | Haier Smart vs. AXWAY SOFTWARE EO | Haier Smart vs. Sqs Software Quality |
| CVB Financial vs. Haier Smart Home | CVB Financial vs. ADDUS HOMECARE | CVB Financial vs. Hisense Home Appliances | CVB Financial 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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