Correlation Between SCHALTBAU HOLDING and Haier Smart

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

By analyzing existing cross correlation between SCHALTBAU HOLDING and Haier Smart Home, you can compare the effects of market volatilities on SCHALTBAU HOLDING and Haier Smart 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 SCHALTBAU HOLDING with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHALTBAU HOLDING and Haier Smart.

Diversification Opportunities for SCHALTBAU HOLDING and Haier Smart

-0.03

Correlation Coefficient

SCHALTBAU HOLDING  Haier Smart

Good diversification

The 3 months correlation between SCHALTBAU and Haier is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SCHALTBAU HOLDING and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of SCHALTBAU HOLDING i.e., SCHALTBAU HOLDING and Haier Smart go up and down completely randomly.

Pair Corralation between SCHALTBAU HOLDING and Haier Smart

Assuming the 90 days trading horizon SCHALTBAU HOLDING is expected to generate 0.6 times more return on investment than Haier Smart. However, SCHALTBAU HOLDING is 1.65 times less risky than Haier Smart. It trades about 0.1 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.0 per unit of risk. If you would invest  5,650  in SCHALTBAU HOLDING on October 10, 2024 and sell it today you would earn a total of  350.00  from holding SCHALTBAU HOLDING or generate 6.19% return on investment over 90 days.

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

SCHALTBAU HOLDING  vs.  Haier Smart Home

SCHALTBAU HOLDING

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCHALTBAU HOLDING are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, SCHALTBAU HOLDING may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Haier Smart Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haier Smart Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Haier Smart 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 SCHALTBAU HOLDING and Haier Smart

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

The idea behind SCHALTBAU HOLDING and Haier Smart Home 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.