Correlation Between Advanced Medical and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Haier Smart 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 Advanced Medical and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Haier Smart Home, you can compare the effects of market volatilities on Advanced Medical and Haier Smart 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 Advanced Medical with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Haier Smart.
Diversification Opportunities for Advanced Medical and Haier Smart
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Haier is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of Advanced Medical i.e., Advanced Medical and Haier Smart go up and down completely randomly.
Pair Corralation between Advanced Medical and Haier Smart
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 1.95 times more return on investment than Haier Smart. However, Advanced Medical is 1.95 times more volatile than Haier Smart Home. It trades about 0.06 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.02 per unit of risk. If you would invest 234.00 in Advanced Medical Solutions on October 24, 2024 and sell it today you would earn a total of 20.00 from holding Advanced Medical Solutions or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Haier Smart Home
Performance |
| Timeline |
| Advanced Medical Sol |
| Haier Smart Home |
Advanced Medical and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Haier Smart
The main advantage of trading using opposite Advanced Medical and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| Advanced Medical vs. TRADELINK ELECTRON | Advanced Medical vs. BJs Restaurants | Advanced Medical vs. SWISS WATER DECAFFCOFFEE | Advanced Medical vs. FAST RETAIL ADR |
| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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