Correlation Between Viavi Solutions and Zepp Health
Can any of the company-specific risk be diversified away by investing in both Viavi Solutions and Zepp Health 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 Viavi Solutions and Zepp Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viavi Solutions and Zepp Health Corp, you can compare the effects of market volatilities on Viavi Solutions and Zepp Health 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 Viavi Solutions with a short position of Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viavi Solutions and Zepp Health.
Diversification Opportunities for Viavi Solutions and Zepp Health
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viavi and Zepp is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Viavi Solutions and Zepp Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zepp Health Corp and Viavi Solutions 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 Viavi Solutions are associated (or correlated) with Zepp Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zepp Health Corp has no effect on the direction of Viavi Solutions i.e., Viavi Solutions and Zepp Health go up and down completely randomly.
Pair Corralation between Viavi Solutions and Zepp Health
Given the investment horizon of 90 days Viavi Solutions is expected to generate 0.66 times more return on investment than Zepp Health. However, Viavi Solutions is 1.52 times less risky than Zepp Health. It trades about -0.02 of its potential returns per unit of risk. Zepp Health Corp is currently generating about -0.02 per unit of risk. If you would invest 1,010 in Viavi Solutions on November 2, 2024 and sell it today you would lose (11.00) from holding Viavi Solutions or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viavi Solutions vs. Zepp Health Corp
Performance |
| Timeline |
| Viavi Solutions |
| Zepp Health Corp |
Viavi Solutions and Zepp Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viavi Solutions and Zepp Health
The main advantage of trading using opposite Viavi Solutions and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viavi Solutions position performs unexpectedly, Zepp Health 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 Zepp Health will offset losses from the drop in Zepp Health's long position.| Viavi Solutions vs. Ciena Corp | Viavi Solutions vs. Infinera | Viavi Solutions vs. Applied Opt | Viavi Solutions vs. Juniper Networks |
| Zepp Health vs. VOXX International | Zepp Health vs. LG Display Co | Zepp Health vs. Emerson Radio | Zepp Health vs. Universal Electronics |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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