Correlation Between Wearable Devices and HWH International
Can any of the company-specific risk be diversified away by investing in both Wearable Devices and HWH International 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 Wearable Devices and HWH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wearable Devices and HWH International, you can compare the effects of market volatilities on Wearable Devices and HWH International 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 Wearable Devices with a short position of HWH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wearable Devices and HWH International.
Diversification Opportunities for Wearable Devices and HWH International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wearable and HWH is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wearable Devices and HWH International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HWH International and Wearable Devices 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 Wearable Devices are associated (or correlated) with HWH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HWH International has no effect on the direction of Wearable Devices i.e., Wearable Devices and HWH International go up and down completely randomly.
Pair Corralation between Wearable Devices and HWH International
Given the investment horizon of 90 days Wearable Devices is expected to under-perform the HWH International. But the stock apears to be less risky and, when comparing its historical volatility, Wearable Devices is 1.41 times less risky than HWH International. The stock trades about -0.16 of its potential returns per unit of risk. The HWH International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 50.00 in HWH International on August 31, 2024 and sell it today you would earn a total of 45.00 from holding HWH International or generate 90.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wearable Devices vs. HWH International
Performance |
| Timeline |
| Wearable Devices |
| HWH International |
Wearable Devices and HWH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wearable Devices and HWH International
The main advantage of trading using opposite Wearable Devices and HWH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wearable Devices position performs unexpectedly, HWH International 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 HWH International will offset losses from the drop in HWH International's long position.| Wearable Devices vs. Koss Corporation | Wearable Devices vs. Wearable Devices | Wearable Devices vs. Sonos Inc | Wearable Devices vs. LG Display Co |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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