Correlation Between HEAR Old and Zepp Health

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

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

Diversification Opportunities for HEAR Old and Zepp Health

0.0

Correlation Coefficient

HEAR Old  Zepp Health

Pay attention - limited upside

The 3 months correlation between HEAR and Zepp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HEAR Old 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 HEAR Old 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 HEAR Old 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 HEAR Old i.e., HEAR Old and Zepp Health go up and down completely randomly.

Pair Corralation between HEAR Old and Zepp Health

If you would invest  278.00  in Zepp Health Corp on December 27, 2024 and sell it today you would earn a total of  68.00  from holding Zepp Health Corp or generate 24.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HEAR Old  vs.  Zepp Health Corp

HEAR Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEAR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HEAR Old is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Zepp Health Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zepp Health Corp are ranked lower than 8 (%) 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 HEAR Old and Zepp Health

The main advantage of trading using opposite HEAR Old and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEAR Old 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 HEAR Old 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.