Correlation Between Haier Smart and Comcast

Can any of the company-specific risk be diversified away by investing in both Haier Smart and Comcast 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 Haier Smart and Comcast into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Haier Smart Home and Comcast, you can compare the effects of market volatilities on Haier Smart and Comcast 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 Haier Smart with a short position of Comcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Comcast.

Diversification Opportunities for Haier Smart and Comcast

-0.71

Correlation Coefficient

Haier Smart  Comcast

Pay attention - limited upside

The 3 months correlation between Haier and Comcast is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Comcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast and Haier Smart 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 Haier Smart Home are associated (or correlated) with Comcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast has no effect on the direction of Haier Smart i.e., Haier Smart and Comcast go up and down completely randomly.

Pair Corralation between Haier Smart and Comcast

Assuming the 90 days trading horizon Haier Smart is expected to generate 1.42 times less return on investment than Comcast. But when comparing it to its historical volatility, Haier Smart Home is 1.12 times less risky than Comcast. It trades about 0.14 of its potential returns per unit of risk. Comcast is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  3,224  in Comcast on December 4, 2024 and sell it today you would earn a total of  188.00  from holding Comcast or generate 5.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Haier Smart Home  vs.  Comcast

Haier Smart Home

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haier Smart Home are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Haier Smart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Comcast

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comcast has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Haier Smart and Comcast

The main advantage of trading using opposite Haier Smart and Comcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Comcast 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 Comcast will offset losses from the drop in Comcast's long position.

The idea behind Haier Smart Home and Comcast pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.