Correlation Between Haier Smart and Boiron SA
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Boiron SA 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 Boiron SA 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 Boiron SA, you can compare the effects of market volatilities on Haier Smart and Boiron SA 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Boiron SA.
Diversification Opportunities for Haier Smart and Boiron SA
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haier and Boiron is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Haier Smart i.e., Haier Smart and Boiron SA go up and down completely randomly.
Pair Corralation between Haier Smart and Boiron SA
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 1.4 times more return on investment than Boiron SA. However, Haier Smart is 1.4 times more volatile than Boiron SA. It trades about -0.01 of its potential returns per unit of risk. Boiron SA is currently generating about -0.4 per unit of risk. If you would invest 175.00 in Haier Smart Home on August 25, 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. Boiron SA
Performance |
| Timeline |
| Haier Smart Home |
| Boiron SA |
Haier Smart and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Boiron SA
The main advantage of trading using opposite Haier Smart and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Boiron SA 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
| Boiron SA vs. Hemisphere Energy Corp | Boiron SA vs. LG Display Co | Boiron SA vs. Ribbon Communications | Boiron SA vs. Verizon Communications |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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