Correlation Between Haier Smart and Man Wah
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Man Wah 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 Man Wah 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 Man Wah Holdings, you can compare the effects of market volatilities on Haier Smart and Man Wah 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 Man Wah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Man Wah.
Diversification Opportunities for Haier Smart and Man Wah
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haier and Man is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Man Wah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Man Wah Holdings 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 Man Wah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Man Wah Holdings has no effect on the direction of Haier Smart i.e., Haier Smart and Man Wah go up and down completely randomly.
Pair Corralation between Haier Smart and Man Wah
Assuming the 90 days horizon Haier Smart Home is expected to generate 0.47 times more return on investment than Man Wah. However, Haier Smart Home is 2.12 times less risky than Man Wah. It trades about -0.14 of its potential returns per unit of risk. Man Wah Holdings is currently generating about -0.32 per unit of risk. If you would invest 1,477 in Haier Smart Home on August 31, 2024 and sell it today you would lose (91.00) from holding Haier Smart Home or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Man Wah Holdings
Performance |
| Timeline |
| Haier Smart Home |
| Man Wah Holdings |
Haier Smart and Man Wah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Man Wah
The main advantage of trading using opposite Haier Smart and Man Wah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Man Wah 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 Man Wah will offset losses from the drop in Man Wah's long position.| Haier Smart vs. La Z Boy Incorporated | Haier Smart vs. MasterBrand | Haier Smart vs. MillerKnoll | Haier Smart vs. Flexsteel Industries |
| Man Wah vs. La Z Boy Incorporated | Man Wah vs. MasterBrand | Man Wah vs. MillerKnoll | Man Wah vs. Flexsteel Industries |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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