Correlation Between Haier Smart and HANNRUECKVSE ADR
Can any of the company-specific risk be diversified away by investing in both Haier Smart and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR 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 HANNRUECKVSE ADR 12ON, you can compare the effects of market volatilities on Haier Smart and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and HANNRUECKVSE ADR.
Diversification Opportunities for Haier Smart and HANNRUECKVSE ADR
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and HANNRUECKVSE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and HANNRUECKVSE ADR 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANNRUECKVSE ADR 12ON 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 HANNRUECKVSE ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANNRUECKVSE ADR 12ON has no effect on the direction of Haier Smart i.e., Haier Smart and HANNRUECKVSE ADR go up and down completely randomly.
Pair Corralation between Haier Smart and HANNRUECKVSE ADR
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.56 times more return on investment than HANNRUECKVSE ADR. However, Haier Smart Home is 1.79 times less risky than HANNRUECKVSE ADR. It trades about 0.06 of its potential returns per unit of risk. HANNRUECKVSE ADR 12ON is currently generating about -0.02 per unit of risk. If you would invest 107.00 in Haier Smart Home on September 3, 2024 and sell it today you would earn a total of 69.00 from holding Haier Smart Home or generate 64.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. HANNRUECKVSE ADR 12ON
Performance |
| Timeline |
| Haier Smart Home |
| HANNRUECKVSE ADR 12ON |
Haier Smart and HANNRUECKVSE ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and HANNRUECKVSE ADR
The main advantage of trading using opposite Haier Smart and HANNRUECKVSE ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, HANNRUECKVSE ADR 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 HANNRUECKVSE ADR will offset losses from the drop in HANNRUECKVSE ADR's long position.| Haier Smart vs. Sixt Leasing SE | Haier Smart vs. ALGOMA STEEL GROUP | Haier Smart vs. Tianjin Capital Environmental | Haier Smart vs. Perma Fix Environmental Services |
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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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