Correlation Between Haier Smart and Australia

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

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

Diversification Opportunities for Haier Smart and Australia

0.56

Correlation Coefficient

Haier Smart  Australia

Very weak diversification

The 3 months correlation between Haier and Australia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Australia And New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia And New and Haier Smart 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 Haier Smart Home are associated (or correlated) with Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia And New has no effect on the direction of Haier Smart i.e., Haier Smart and Australia go up and down completely randomly.

Pair Corralation between Haier Smart and Australia

If you would invest  315.00  in Haier Smart Home on March 4, 2024 and sell it today you would earn a total of  69.00  from holding Haier Smart Home or generate 21.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Haier Smart Home  vs.  Australia And New

Haier Smart Home

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Haier Smart Home are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Haier Smart reported solid returns over the last few months and may actually be approaching a breakup point.

Australia And New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Australia And New has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Australia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Haier Smart and Australia

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

The idea behind Haier Smart Home and Australia And New 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.