Correlation Between Huadi International and XIAOMI

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

By analyzing existing cross correlation between Huadi International Group and XIAOMI 3375 29 APR 30, you can compare the effects of market volatilities on Huadi International and XIAOMI 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 Huadi International with a short position of XIAOMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huadi International and XIAOMI.

Diversification Opportunities for Huadi International and XIAOMI

-0.81

Correlation Coefficient

Huadi International  XIAOMI

Pay attention - limited upside

The 3 months correlation between Huadi and XIAOMI is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Huadi International Group and XIAOMI 3375 29 APR 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIAOMI 3375 29 and Huadi International 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 Huadi International Group are associated (or correlated) with XIAOMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIAOMI 3375 29 has no effect on the direction of Huadi International i.e., Huadi International and XIAOMI go up and down completely randomly.

Pair Corralation between Huadi International and XIAOMI

Given the investment horizon of 90 days Huadi International Group is expected to generate 1.06 times more return on investment than XIAOMI. However, Huadi International is 1.06 times more volatile than XIAOMI 3375 29 APR 30. It trades about -0.18 of its potential returns per unit of risk. XIAOMI 3375 29 APR 30 is currently generating about -0.35 per unit of risk. If you would invest  261.00  in Huadi International Group on October 1, 2024 and sell it today you would lose (90.00) from holding Huadi International Group or give up 34.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	15.87%
Values	Daily Returns

Huadi International Group  vs.  XIAOMI 3375 29 APR 30

Huadi International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huadi International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

XIAOMI 3375 29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XIAOMI 3375 29 APR 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for XIAOMI 3375 29 APR 30 investors.

Pair Trading with Huadi International and XIAOMI

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

The idea behind Huadi International Group and XIAOMI 3375 29 APR 30 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.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.