Correlation Between Haier Smart and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on Haier Smart and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Virtus Investment.
Diversification Opportunities for Haier Smart and Virtus Investment
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and Virtus is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Haier Smart i.e., Haier Smart and Virtus Investment go up and down completely randomly.
Pair Corralation between Haier Smart and Virtus Investment
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.94 times more return on investment than Virtus Investment. However, Haier Smart Home is 1.06 times less risky than Virtus Investment. It trades about 0.12 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about 0.02 per unit of risk. If you would invest 103.00 in Haier Smart Home on November 5, 2024 and sell it today you would earn a total of 79.00 from holding Haier Smart Home or generate 76.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Virtus Investment Partners
Performance |
| Timeline |
| Haier Smart Home |
| Virtus Investment |
Haier Smart and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Virtus Investment
The main advantage of trading using opposite Haier Smart and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| Haier Smart vs. TT Electronics PLC | Haier Smart vs. JAPAN AIRLINES | Haier Smart vs. Arrow Electronics | Haier Smart vs. Richardson Electronics |
| Virtus Investment vs. Stag Industrial | Virtus Investment vs. GRIFFIN MINING LTD | Virtus Investment vs. Zijin Mining Group | Virtus Investment vs. East Africa Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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