Correlation Between Wearable Devices and Xiaomi Corp
Can any of the company-specific risk be diversified away by investing in both Wearable Devices 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 Wearable Devices and Xiaomi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wearable Devices and Xiaomi Corp, you can compare the effects of market volatilities on Wearable Devices 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 Wearable Devices with a short position of Xiaomi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wearable Devices and Xiaomi Corp.
Diversification Opportunities for Wearable Devices and Xiaomi Corp
-0.97 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wearable and Xiaomi is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding Wearable Devices and Xiaomi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi Corp 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 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 Wearable Devices i.e., Wearable Devices and Xiaomi Corp go up and down completely randomly.
Pair Corralation between Wearable Devices and Xiaomi Corp
Given the investment horizon of 90 days Wearable Devices is expected to under-perform the Xiaomi Corp. In addition to that, Wearable Devices is 5.01 times more volatile than Xiaomi Corp. It trades about -0.03 of its total potential returns per unit of risk. Xiaomi Corp is currently generating about 0.09 per unit of volatility. If you would invest 330.00 in Xiaomi Corp on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Xiaomi Corp or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wearable Devices vs. Xiaomi Corp
Performance |
| Timeline |
| Wearable Devices |
| Xiaomi Corp |
Wearable Devices and Xiaomi Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wearable Devices and Xiaomi Corp
The main advantage of trading using opposite Wearable Devices and Xiaomi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wearable Devices 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.| Wearable Devices vs. Koss Corporation | Wearable Devices vs. Wearable Devices | Wearable Devices vs. Sonos Inc | Wearable Devices vs. LG Display Co |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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