Correlation Between Boiron SA and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Boiron SA 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 Boiron SA and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boiron SA and Haier Smart Home, you can compare the effects of market volatilities on Boiron SA 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 Boiron SA with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and Haier Smart.
Diversification Opportunities for Boiron SA and Haier Smart
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boiron and Haier is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA 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 Boiron SA 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 Boiron SA 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 Boiron SA i.e., Boiron SA and Haier Smart go up and down completely randomly.
Pair Corralation between Boiron SA and Haier Smart
Assuming the 90 days horizon Boiron SA is expected to under-perform the Haier Smart. But the stock apears to be less risky and, when comparing its historical volatility, Boiron SA is 1.4 times less risky than Haier Smart. The stock trades about -0.4 of its potential returns per unit of risk. The Haier Smart Home is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 175.00 in Haier Smart Home on August 25, 2024 and sell it today you would lose (1.00) from holding Haier Smart Home or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boiron SA vs. Haier Smart Home
Performance |
| Timeline |
| Boiron SA |
| Haier Smart Home |
Boiron SA and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boiron SA and Haier Smart
The main advantage of trading using opposite Boiron SA and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA 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.| Boiron SA vs. Hemisphere Energy Corp | Boiron SA vs. LG Display Co | Boiron SA vs. Ribbon Communications | Boiron SA vs. Verizon Communications |
| 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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