Correlation Between Hewlett Packard and Zepp Health

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

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

Diversification Opportunities for Hewlett Packard and Zepp Health

-0.62

Correlation Coefficient

Hewlett Packard  Zepp Health

Excellent diversification

The 3 months correlation between Hewlett and Zepp is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hewlett Packard Enterprise 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 Hewlett Packard 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 Hewlett Packard Enterprise 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 Hewlett Packard i.e., Hewlett Packard and Zepp Health go up and down completely randomly.

Pair Corralation between Hewlett Packard and Zepp Health

Considering the 90-day investment horizon Hewlett Packard Enterprise is expected to generate 0.49 times more return on investment than Zepp Health. However, Hewlett Packard Enterprise is 2.06 times less risky than Zepp Health. It trades about 0.07 of its potential returns per unit of risk. Zepp Health Corp is currently generating about 0.0 per unit of risk. If you would invest  1,709  in Hewlett Packard Enterprise on October 9, 2024 and sell it today you would earn a total of  519.00  from holding Hewlett Packard Enterprise or generate 30.37% return on investment over 90 days.

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

Hewlett Packard Enterprise  vs.  Zepp Health Corp

Hewlett Packard Ente

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Hewlett Packard may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Zepp Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hewlett Packard and Zepp Health

The main advantage of trading using opposite Hewlett Packard and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hewlett Packard 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 Hewlett Packard Enterprise 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.