Correlation Between Haier Smart and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Haier Smart and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on Haier Smart and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and SCOTT TECHNOLOGY.
Diversification Opportunities for Haier Smart and SCOTT TECHNOLOGY
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and SCOTT is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of Haier Smart i.e., Haier Smart and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between Haier Smart and SCOTT TECHNOLOGY
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.69 times more return on investment than SCOTT TECHNOLOGY. However, Haier Smart Home is 1.45 times less risky than SCOTT TECHNOLOGY. It trades about -0.03 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about -0.03 per unit of risk. If you would invest 183.00 in Haier Smart Home on November 2, 2024 and sell it today you would lose (2.00) from holding Haier Smart Home or give up 1.09% 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. SCOTT TECHNOLOGY
Performance |
| Timeline |
| Haier Smart Home |
| SCOTT TECHNOLOGY |
Haier Smart and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and SCOTT TECHNOLOGY
The main advantage of trading using opposite Haier Smart and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| Haier Smart vs. Guangdong Investment Limited | Haier Smart vs. Virtus Investment Partners | Haier Smart vs. MGIC INVESTMENT | Haier Smart vs. EIDESVIK OFFSHORE NK |
| SCOTT TECHNOLOGY vs. DeVry Education Group | SCOTT TECHNOLOGY vs. SPARTAN STORES | SCOTT TECHNOLOGY vs. AEON STORES | SCOTT TECHNOLOGY vs. H2O Retailing |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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