Correlation Between Viomi Technology and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both Viomi Technology and Bassett Furniture 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 Viomi Technology and Bassett Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viomi Technology ADR and Bassett Furniture Industries, you can compare the effects of market volatilities on Viomi Technology and Bassett Furniture 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 Viomi Technology with a short position of Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viomi Technology and Bassett Furniture.
Diversification Opportunities for Viomi Technology and Bassett Furniture
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Viomi and Bassett is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Viomi Technology ADR and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture and Viomi Technology 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 Viomi Technology ADR are associated (or correlated) with Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of Viomi Technology i.e., Viomi Technology and Bassett Furniture go up and down completely randomly.
Pair Corralation between Viomi Technology and Bassett Furniture
Given the investment horizon of 90 days Viomi Technology ADR is expected to generate 2.41 times more return on investment than Bassett Furniture. However, Viomi Technology is 2.41 times more volatile than Bassett Furniture Industries. It trades about 0.04 of its potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.0 per unit of risk. If you would invest 112.00 in Viomi Technology ADR on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Viomi Technology ADR or generate 49.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viomi Technology ADR vs. Bassett Furniture Industries
Performance |
| Timeline |
| Viomi Technology ADR |
| Bassett Furniture |
Viomi Technology and Bassett Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viomi Technology and Bassett Furniture
The main advantage of trading using opposite Viomi Technology and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viomi Technology position performs unexpectedly, Bassett Furniture 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 Bassett Furniture will offset losses from the drop in Bassett Furniture's long position.| Viomi Technology vs. Bassett Furniture Industries | Viomi Technology vs. Ethan Allen Interiors | Viomi Technology vs. Natuzzi SpA | Viomi Technology vs. Flexsteel Industries |
| Bassett Furniture vs. Hooker Furniture | Bassett Furniture vs. Flexsteel Industries | Bassett Furniture vs. Haverty Furniture Companies | Bassett Furniture vs. La Z Boy Incorporated |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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