Correlation Between GoPro and Xiaomi Corp
Can any of the company-specific risk be diversified away by investing in both GoPro and Xiaomi Corp 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 GoPro and Xiaomi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoPro Inc and Xiaomi Corp ADR, you can compare the effects of market volatilities on GoPro and Xiaomi Corp 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 GoPro with a short position of Xiaomi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and Xiaomi Corp.
Diversification Opportunities for GoPro and Xiaomi Corp
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GoPro and Xiaomi is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Xiaomi Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi Corp ADR and GoPro 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 GoPro Inc are associated (or correlated) with Xiaomi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi Corp ADR has no effect on the direction of GoPro i.e., GoPro and Xiaomi Corp go up and down completely randomly.
Pair Corralation between GoPro and Xiaomi Corp
Given the investment horizon of 90 days GoPro Inc is expected to under-perform the Xiaomi Corp. In addition to that, GoPro is 1.52 times more volatile than Xiaomi Corp ADR. It trades about -0.03 of its total potential returns per unit of risk. Xiaomi Corp ADR is currently generating about 0.15 per unit of volatility. If you would invest 1,140 in Xiaomi Corp ADR on August 24, 2024 and sell it today you would earn a total of 669.00 from holding Xiaomi Corp ADR or generate 58.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoPro Inc vs. Xiaomi Corp ADR
Performance |
| Timeline |
| GoPro Inc |
| Xiaomi Corp ADR |
GoPro and Xiaomi Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoPro and Xiaomi Corp
The main advantage of trading using opposite GoPro and Xiaomi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro position performs unexpectedly, Xiaomi Corp 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 Xiaomi Corp will offset losses from the drop in Xiaomi Corp's long position.| GoPro vs. Sony Group Corp | GoPro vs. LG Display Co | GoPro vs. Vizio Holding Corp | GoPro vs. Universal Electronics |
| Xiaomi Corp vs. Samsung Electronics Co | Xiaomi Corp vs. Sharp Corp ADR | Xiaomi Corp vs. LG Display Co | Xiaomi Corp vs. Vizio Holding Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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