Correlation Between Zepp Health and Utime

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

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

Diversification Opportunities for Zepp Health and Utime

-0.52

Correlation Coefficient

Zepp Health  Utime

Excellent diversification

The 3 months correlation between Zepp and Utime is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zepp Health Corp and Utime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utime and Zepp Health 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 Zepp Health Corp are associated (or correlated) with Utime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utime has no effect on the direction of Zepp Health i.e., Zepp Health and Utime go up and down completely randomly.

Pair Corralation between Zepp Health and Utime

If you would invest  55.00  in Utime on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Utime or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Zepp Health Corp  vs.  Utime

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.

Utime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Utime is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zepp Health and Utime

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

The idea behind Zepp Health Corp and Utime 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.