Correlation Between Vuzix Corp and Xiaomi Corp
Can any of the company-specific risk be diversified away by investing in both Vuzix Corp and Xiaomi Corp 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 Vuzix Corp and Xiaomi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vuzix Corp Cmn and Xiaomi Corp, you can compare the effects of market volatilities on Vuzix Corp and Xiaomi Corp 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 Vuzix Corp with a short position of Xiaomi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vuzix Corp and Xiaomi Corp.
Diversification Opportunities for Vuzix Corp and Xiaomi Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vuzix and Xiaomi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vuzix Corp Cmn and Xiaomi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi Corp and Vuzix Corp 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 Vuzix Corp Cmn are associated (or correlated) with Xiaomi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi Corp has no effect on the direction of Vuzix Corp i.e., Vuzix Corp and Xiaomi Corp go up and down completely randomly.
Pair Corralation between Vuzix Corp and Xiaomi Corp
Given the investment horizon of 90 days Vuzix Corp Cmn is expected to generate 2.36 times more return on investment than Xiaomi Corp. However, Vuzix Corp is 2.36 times more volatile than Xiaomi Corp. It trades about 0.09 of its potential returns per unit of risk. Xiaomi Corp is currently generating about 0.17 per unit of risk. If you would invest 168.00 in Vuzix Corp Cmn on November 3, 2024 and sell it today you would earn a total of 246.00 from holding Vuzix Corp Cmn or generate 146.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vuzix Corp Cmn vs. Xiaomi Corp
Performance |
| Timeline |
| Vuzix Corp Cmn |
| Xiaomi Corp |
Vuzix Corp and Xiaomi Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vuzix Corp and Xiaomi Corp
The main advantage of trading using opposite Vuzix Corp and Xiaomi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vuzix Corp position performs unexpectedly, Xiaomi Corp 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 Xiaomi Corp will offset losses from the drop in Xiaomi Corp's long position.| Vuzix Corp vs. LG Display Co | Vuzix Corp vs. Universal Electronics | Vuzix Corp vs. VOXX International | Vuzix Corp vs. Sonos Inc |
| Xiaomi Corp vs. Zepp Health Corp | Xiaomi Corp vs. Samsung Electronics Co | Xiaomi Corp vs. LG Display Co | Xiaomi Corp vs. Sharp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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