Correlation Between VOXX International and Wearable Devices
Can any of the company-specific risk be diversified away by investing in both VOXX International and Wearable Devices 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 VOXX International and Wearable Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VOXX International and Wearable Devices, you can compare the effects of market volatilities on VOXX International and Wearable Devices 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 VOXX International with a short position of Wearable Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of VOXX International and Wearable Devices.
Diversification Opportunities for VOXX International and Wearable Devices
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VOXX and Wearable is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and Wearable Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wearable Devices and VOXX International 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 VOXX International are associated (or correlated) with Wearable Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wearable Devices has no effect on the direction of VOXX International i.e., VOXX International and Wearable Devices go up and down completely randomly.
Pair Corralation between VOXX International and Wearable Devices
Given the investment horizon of 90 days VOXX International is expected to generate 0.88 times more return on investment than Wearable Devices. However, VOXX International is 1.13 times less risky than Wearable Devices. It trades about 0.0 of its potential returns per unit of risk. Wearable Devices is currently generating about -0.05 per unit of risk. If you would invest 1,074 in VOXX International on August 26, 2024 and sell it today you would lose (330.00) from holding VOXX International or give up 30.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VOXX International vs. Wearable Devices
Performance |
| Timeline |
| VOXX International |
| Wearable Devices |
VOXX International and Wearable Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VOXX International and Wearable Devices
The main advantage of trading using opposite VOXX International and Wearable Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VOXX International position performs unexpectedly, Wearable Devices 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 Wearable Devices will offset losses from the drop in Wearable Devices' long position.| VOXX International vs. LG Display Co | VOXX International vs. Vizio Holding Corp | VOXX International vs. Turtle Beach Corp | VOXX International vs. Emerson Radio |
| Wearable Devices vs. Koss Corporation | Wearable Devices vs. Wearable Devices | Wearable Devices vs. Sonos Inc | Wearable Devices vs. LG Display Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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