Correlation Between Eshallgo and Zepp Health

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

By analyzing existing cross correlation between Eshallgo Class A and Zepp Health Corp, you can compare the effects of market volatilities on Eshallgo 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 Eshallgo with a short position of Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Zepp Health.

Diversification Opportunities for Eshallgo and Zepp Health

-0.22

Correlation Coefficient

Eshallgo  Zepp Health

Very good diversification

The 3 months correlation between Eshallgo and Zepp is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A 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 Eshallgo 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 Eshallgo Class A 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 Eshallgo i.e., Eshallgo and Zepp Health go up and down completely randomly.

Pair Corralation between Eshallgo and Zepp Health

Given the investment horizon of 90 days Eshallgo Class A is expected to under-perform the Zepp Health. In addition to that, Eshallgo is 2.01 times more volatile than Zepp Health Corp. It trades about -0.17 of its total potential returns per unit of risk. Zepp Health Corp is currently generating about 0.12 per unit of volatility. If you would invest  270.00  in Zepp Health Corp on December 28, 2024 and sell it today you would earn a total of  76.00  from holding Zepp Health Corp or generate 28.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Eshallgo Class A  vs.  Zepp Health Corp

Eshallgo Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eshallgo Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Zepp Health Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zepp Health Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Zepp Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eshallgo and Zepp Health

The main advantage of trading using opposite Eshallgo and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo 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.

The idea behind Eshallgo Class A and Zepp Health Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.