Correlation Between Hamilton Beach and Viomi Technology

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

By analyzing existing cross correlation between Hamilton Beach Brands and Viomi Technology ADR, you can compare the effects of market volatilities on Hamilton Beach and Viomi Technology 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 Hamilton Beach with a short position of Viomi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and Viomi Technology.

Diversification Opportunities for Hamilton Beach and Viomi Technology

0.47

Correlation Coefficient

Hamilton Beach  Viomi Technology

Very weak diversification

The 3 months correlation between Hamilton and Viomi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Viomi Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viomi Technology ADR and Hamilton Beach 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 Hamilton Beach Brands are associated (or correlated) with Viomi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viomi Technology ADR has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Viomi Technology go up and down completely randomly.

Pair Corralation between Hamilton Beach and Viomi Technology

Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 0.73 times more return on investment than Viomi Technology. However, Hamilton Beach Brands is 1.37 times less risky than Viomi Technology. It trades about 0.28 of its potential returns per unit of risk. Viomi Technology ADR is currently generating about 0.16 per unit of risk. If you would invest  1,621  in Hamilton Beach Brands on December 3, 2024 and sell it today you would earn a total of  328.00  from holding Hamilton Beach Brands or generate 20.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hamilton Beach Brands  vs.  Viomi Technology ADR

Hamilton Beach Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hamilton Beach Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Hamilton Beach is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Viomi Technology ADR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Viomi Technology ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Viomi Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hamilton Beach and Viomi Technology

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

The idea behind Hamilton Beach Brands and Viomi Technology ADR 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.