Correlation Between Haier Smart and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Haier Smart and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on Haier Smart and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and GEELY AUTOMOBILE.
Diversification Opportunities for Haier Smart and GEELY AUTOMOBILE
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haier and GEELY is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Haier Smart i.e., Haier Smart and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Haier Smart and GEELY AUTOMOBILE
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.95 times more return on investment than GEELY AUTOMOBILE. However, Haier Smart Home is 1.06 times less risky than GEELY AUTOMOBILE. It trades about 0.05 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about -0.3 per unit of risk. If you would invest 178.00 in Haier Smart Home on October 11, 2024 and sell it today you would earn a total of 2.00 from holding Haier Smart Home or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Haier Smart Home vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Haier Smart Home |
| GEELY AUTOMOBILE |
Haier Smart and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and GEELY AUTOMOBILE
The main advantage of trading using opposite Haier Smart and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Haier Smart vs. American Homes 4 | Haier Smart vs. ADDUS HOMECARE | Haier Smart vs. GREENX METALS LTD | Haier Smart vs. CITY OFFICE REIT |
| GEELY AUTOMOBILE vs. CarsalesCom | GEELY AUTOMOBILE vs. Xenia Hotels Resorts | GEELY AUTOMOBILE vs. Gruppo Mutuionline SpA | GEELY AUTOMOBILE vs. CODERE ONLINE LUX |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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