Correlation Between Wearable Devices and VOXX International

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

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

Diversification Opportunities for Wearable Devices and VOXX International

0.03

Correlation Coefficient

Wearable Devices  VOXX International

Significant diversification

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

Pair Corralation between Wearable Devices and VOXX International

Given the investment horizon of 90 days Wearable Devices is expected to under-perform the VOXX International. In addition to that, Wearable Devices is 2.33 times more volatile than VOXX International. It trades about -0.21 of its total potential returns per unit of risk. VOXX International is currently generating about -0.34 per unit of volatility. If you would invest  807.00  in VOXX International on February 1, 2024 and sell it today you would lose (155.00) from holding VOXX International or give up 19.21% of portfolio value over 90 days.

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

Wearable Devices  vs.  VOXX International

Wearable Devices

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wearable Devices are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Wearable Devices may actually be approaching a critical reversion point that can send shares even higher in June 2024.

VOXX International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VOXX International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wearable Devices and VOXX International

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

The idea behind Wearable Devices and VOXX International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.