Correlation Between Vodka Brands and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Vodka Brands and Hesai Group 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 Vodka Brands and Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodka Brands Corp and Hesai Group American, you can compare the effects of market volatilities on Vodka Brands and Hesai Group 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 Vodka Brands with a short position of Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and Hesai Group.
Diversification Opportunities for Vodka Brands and Hesai Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vodka and Hesai is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American and Vodka Brands 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 Vodka Brands Corp are associated (or correlated) with Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Vodka Brands i.e., Vodka Brands and Hesai Group go up and down completely randomly.
Pair Corralation between Vodka Brands and Hesai Group
Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 1.35 times more return on investment than Hesai Group. However, Vodka Brands is 1.35 times more volatile than Hesai Group American. It trades about 0.03 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.02 per unit of risk. If you would invest 200.00 in Vodka Brands Corp on November 1, 2024 and sell it today you would lose (79.00) from holding Vodka Brands Corp or give up 39.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Vodka Brands Corp vs. Hesai Group American
Performance |
| Timeline |
| Vodka Brands Corp |
| Hesai Group American |
Vodka Brands and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodka Brands and Hesai Group
The main advantage of trading using opposite Vodka Brands and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| Vodka Brands vs. Brown Forman | Vodka Brands vs. Brown Forman | Vodka Brands vs. Eastside Distilling | Vodka Brands vs. Diageo PLC ADR |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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