Correlation Between Xiaomi Corp and Vuzix Corp
Can any of the company-specific risk be diversified away by investing in both Xiaomi Corp and Vuzix 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 Xiaomi Corp and Vuzix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xiaomi Corp and Vuzix Corp Cmn, you can compare the effects of market volatilities on Xiaomi Corp and Vuzix 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 Xiaomi Corp with a short position of Vuzix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiaomi Corp and Vuzix Corp.
Diversification Opportunities for Xiaomi Corp and Vuzix Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiaomi and Vuzix is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xiaomi Corp and Vuzix Corp Cmn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vuzix Corp Cmn and Xiaomi 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 Xiaomi Corp are associated (or correlated) with Vuzix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vuzix Corp Cmn has no effect on the direction of Xiaomi Corp i.e., Xiaomi Corp and Vuzix Corp go up and down completely randomly.
Pair Corralation between Xiaomi Corp and Vuzix Corp
Assuming the 90 days horizon Xiaomi Corp is expected to generate 1.18 times less return on investment than Vuzix Corp. But when comparing it to its historical volatility, Xiaomi Corp is 2.36 times less risky than Vuzix Corp. It trades about 0.17 of its potential returns per unit of risk. Vuzix Corp Cmn is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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 |
Xiaomi Corp vs. Vuzix Corp Cmn
Performance |
| Timeline |
| Xiaomi Corp |
| Vuzix Corp Cmn |
Xiaomi Corp and Vuzix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiaomi Corp and Vuzix Corp
The main advantage of trading using opposite Xiaomi Corp and Vuzix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiaomi Corp position performs unexpectedly, Vuzix 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 Vuzix Corp will offset losses from the drop in Vuzix Corp's long position.| Xiaomi Corp vs. Zepp Health Corp | Xiaomi Corp vs. Samsung Electronics Co | Xiaomi Corp vs. LG Display Co | Xiaomi Corp vs. Sharp |
| Vuzix Corp vs. LG Display Co | Vuzix Corp vs. Universal Electronics | Vuzix Corp vs. VOXX International | Vuzix Corp vs. Sonos Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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