Correlation Between Koss and Zepp Health

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

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

Diversification Opportunities for Koss and Zepp Health

-0.26

Correlation Coefficient

Koss  Zepp Health

Very good diversification

The 3 months correlation between Koss and Zepp is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. 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 Koss 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 Koss Corporation 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 Koss i.e., Koss and Zepp Health go up and down completely randomly.

Pair Corralation between Koss and Zepp Health

Given the investment horizon of 90 days Koss Corporation is expected to under-perform the Zepp Health. In addition to that, Koss is 1.08 times more volatile than Zepp Health Corp. It trades about -0.13 of its total potential returns per unit of risk. Zepp Health Corp is currently generating about 0.05 per unit of volatility. If you would invest  278.00  in Zepp Health Corp on December 27, 2024 and sell it today you would earn a total of  22.00  from holding Zepp Health Corp or generate 7.91% return on investment over 90 days.

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

Koss Corp.  vs.  Zepp Health Corp

Koss

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Zepp Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Koss and Zepp Health

The main advantage of trading using opposite Koss and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koss 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 Koss Corporation 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.