Correlation Between VerifyMe and Zepp Health
Can any of the company-specific risk be diversified away by investing in both VerifyMe 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 VerifyMe and Zepp Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VerifyMe and Zepp Health Corp, you can compare the effects of market volatilities on VerifyMe 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 VerifyMe with a short position of Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of VerifyMe and Zepp Health.
Diversification Opportunities for VerifyMe and Zepp Health
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VerifyMe and Zepp is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe 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 VerifyMe 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 VerifyMe 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 VerifyMe i.e., VerifyMe and Zepp Health go up and down completely randomly.
Pair Corralation between VerifyMe and Zepp Health
Given the investment horizon of 90 days VerifyMe is expected to under-perform the Zepp Health. In addition to that, VerifyMe is 1.21 times more volatile than Zepp Health Corp. It trades about -0.25 of its total potential returns per unit of risk. Zepp Health Corp is currently generating about 0.04 per unit of volatility. If you would invest 311.00 in Zepp Health Corp on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Zepp Health Corp or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VerifyMe vs. Zepp Health Corp
Performance |
| Timeline |
| VerifyMe |
| Zepp Health Corp |
VerifyMe and Zepp Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VerifyMe and Zepp Health
The main advantage of trading using opposite VerifyMe and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe 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.The idea behind VerifyMe and Zepp Health Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Zepp Health vs. VOXX International | Zepp Health vs. LG Display Co | Zepp Health vs. Vizio Holding Corp | Zepp Health vs. Turtle Beach Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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