Correlation Between Zepp Health and GoPro
Can any of the company-specific risk be diversified away by investing in both Zepp Health and GoPro 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 GoPro 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 GoPro Inc, you can compare the effects of market volatilities on Zepp Health and GoPro 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 GoPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zepp Health and GoPro.
Diversification Opportunities for Zepp Health and GoPro
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zepp and GoPro is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zepp Health Corp and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro 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 GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Zepp Health i.e., Zepp Health and GoPro go up and down completely randomly.
Pair Corralation between Zepp Health and GoPro
Given the investment horizon of 90 days Zepp Health Corp is expected to generate 1.56 times more return on investment than GoPro. However, Zepp Health is 1.56 times more volatile than GoPro Inc. It trades about -0.02 of its potential returns per unit of risk. GoPro Inc is currently generating about -0.29 per unit of risk. If you would invest 287.00 in Zepp Health Corp on November 3, 2024 and sell it today you would lose (7.00) from holding Zepp Health Corp or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zepp Health Corp vs. GoPro Inc
Performance |
| Timeline |
| Zepp Health Corp |
| GoPro Inc |
Zepp Health and GoPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zepp Health and GoPro
The main advantage of trading using opposite Zepp Health and GoPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zepp Health position performs unexpectedly, GoPro 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 GoPro will offset losses from the drop in GoPro's long position.| Zepp Health vs. VOXX International | Zepp Health vs. LG Display Co | Zepp Health vs. Emerson Radio | Zepp Health vs. Universal Electronics |
| GoPro vs. Sony Group Corp | GoPro vs. LG Display Co | GoPro vs. Universal Electronics | GoPro vs. VOXX International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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