Correlation Between Haier Smart and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Haier Smart and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Compagnie Plastic.
Diversification Opportunities for Haier Smart and Compagnie Plastic
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haier and Compagnie is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Haier Smart i.e., Haier Smart and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Haier Smart and Compagnie Plastic
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.55 times more return on investment than Compagnie Plastic. However, Haier Smart Home is 1.83 times less risky than Compagnie Plastic. It trades about -0.03 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.17 per unit of risk. If you would invest 177.00 in Haier Smart Home on August 27, 2024 and sell it today you would lose (2.00) from holding Haier Smart Home or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Haier Smart Home |
| Compagnie Plastic Omnium |
Haier Smart and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Compagnie Plastic
The main advantage of trading using opposite Haier Smart and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
| Compagnie Plastic vs. Astral Foods Limited | Compagnie Plastic vs. Haier Smart Home | Compagnie Plastic vs. AUSTEVOLL SEAFOOD | Compagnie Plastic vs. SENECA FOODS A |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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