Correlation Between Empire Global and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Empire Global and Haier Smart 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 Empire Global and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Global Gaming and Haier Smart Home, you can compare the effects of market volatilities on Empire Global and Haier Smart 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 Empire Global with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and Haier Smart.
Diversification Opportunities for Empire Global and Haier Smart
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Empire and Haier is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and Empire Global 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 Empire Global Gaming are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of Empire Global i.e., Empire Global and Haier Smart go up and down completely randomly.
Pair Corralation between Empire Global and Haier Smart
If you would invest 341.00 in Haier Smart Home on December 2, 2024 and sell it today you would earn a total of 9.00 from holding Haier Smart Home or generate 2.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
Empire Global Gaming vs. Haier Smart Home
Performance |
Timeline |
Empire Global Gaming |
Risk-Adjusted Performance
Good
Weak | Strong |
Haier Smart Home |
Empire Global and Haier Smart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Empire Global and Haier Smart
The main advantage of trading using opposite Empire Global and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Global position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.Empire Global vs. Churchill Downs Incorporated | Empire Global vs. Gan | Empire Global vs. Rush Street Interactive | Empire Global vs. Lottery, Common Stock |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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