Correlation Between Wearable Devices and Zepp Health
Can any of the company-specific risk be diversified away by investing in both Wearable Devices 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 Wearable Devices and Zepp Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wearable Devices and Zepp Health Corp, you can compare the effects of market volatilities on Wearable Devices 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 Wearable Devices with a short position of Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wearable Devices and Zepp Health.
Diversification Opportunities for Wearable Devices and Zepp Health
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wearable and Zepp is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wearable Devices 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 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 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 Wearable Devices i.e., Wearable Devices and Zepp Health go up and down completely randomly.
Pair Corralation between Wearable Devices and Zepp Health
Assuming the 90 days horizon Wearable Devices is expected to generate 26.95 times more return on investment than Zepp Health. However, Wearable Devices is 26.95 times more volatile than Zepp Health Corp. It trades about 0.12 of its potential returns per unit of risk. Zepp Health Corp is currently generating about -0.01 per unit of risk. If you would invest 1.50 in Wearable Devices on August 27, 2024 and sell it today you would earn a total of 9.50 from holding Wearable Devices or generate 633.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.99% |
| Values | Daily Returns |
Wearable Devices vs. Zepp Health Corp
Performance |
| Timeline |
| Wearable Devices |
| Zepp Health Corp |
Wearable Devices and Zepp Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wearable Devices and Zepp Health
The main advantage of trading using opposite Wearable Devices and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wearable Devices 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.| Wearable Devices vs. Wearable Devices | Wearable Devices vs. Yoshiharu Global Co | Wearable Devices vs. bioAffinity Technologies, |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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