Correlation Between Commercial Vehicle and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle 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 Commercial Vehicle and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Haier Smart Home, you can compare the effects of market volatilities on Commercial Vehicle 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 Commercial Vehicle with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Haier Smart.
Diversification Opportunities for Commercial Vehicle and Haier Smart
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commercial and Haier is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group 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 Commercial Vehicle 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 Commercial Vehicle Group 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 Commercial Vehicle i.e., Commercial Vehicle and Haier Smart go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Haier Smart
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Haier Smart. In addition to that, Commercial Vehicle is 2.66 times more volatile than Haier Smart Home. It trades about -0.24 of its total potential returns per unit of risk. Haier Smart Home is currently generating about -0.03 per unit of volatility. If you would invest 177.00 in Haier Smart Home on August 28, 2024 and sell it today you would lose (2.00) from holding Haier Smart Home or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Haier Smart Home
Performance |
| Timeline |
| Commercial Vehicle |
| Haier Smart Home |
Commercial Vehicle and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Haier Smart
The main advantage of trading using opposite Commercial Vehicle and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle 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.| Commercial Vehicle vs. XLMedia PLC | Commercial Vehicle vs. Flutter Entertainment PLC | Commercial Vehicle vs. ANTA SPORTS PRODUCT | Commercial Vehicle vs. PT Global Mediacom |
| Haier Smart vs. Commercial Vehicle Group | Haier Smart vs. CARSALESCOM | Haier Smart vs. DELTA AIR LINES | Haier Smart vs. ALTAIR RES 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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