Correlation Between Zepp Health and Apple
Can any of the company-specific risk be diversified away by investing in both Zepp Health and Apple 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 Zepp Health and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zepp Health Corp and Apple Inc, you can compare the effects of market volatilities on Zepp Health and Apple 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 Zepp Health with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zepp Health and Apple.
Diversification Opportunities for Zepp Health and Apple
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zepp and Apple is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Zepp Health Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Zepp Health 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 Zepp Health Corp are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Zepp Health i.e., Zepp Health and Apple go up and down completely randomly.
Pair Corralation between Zepp Health and Apple
Given the investment horizon of 90 days Zepp Health Corp is expected to under-perform the Apple. In addition to that, Zepp Health is 3.41 times more volatile than Apple Inc. It trades about -0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.07 per unit of volatility. If you would invest 15,248 in Apple Inc on November 2, 2024 and sell it today you would earn a total of 8,587 from holding Apple Inc or generate 56.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zepp Health Corp vs. Apple Inc
Performance |
| Timeline |
| Zepp Health Corp |
| Apple Inc |
Zepp Health and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zepp Health and Apple
The main advantage of trading using opposite Zepp Health and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zepp Health position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Zepp Health vs. VOXX International | Zepp Health vs. LG Display Co | Zepp Health vs. Emerson Radio | Zepp Health vs. Universal Electronics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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