Correlation Between Zepp Health and Perfect Corp

Can any of the company-specific risk be diversified away by investing in both Zepp Health and Perfect Corp 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 Perfect Corp 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 Perfect Corp, you can compare the effects of market volatilities on Zepp Health and Perfect Corp 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 Perfect Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zepp Health and Perfect Corp.

Diversification Opportunities for Zepp Health and Perfect Corp

0.57

Correlation Coefficient

Zepp Health  Perfect Corp

Very weak diversification

The 3 months correlation between Zepp and Perfect is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Zepp Health Corp and Perfect Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perfect Corp 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 Perfect Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perfect Corp has no effect on the direction of Zepp Health i.e., Zepp Health and Perfect Corp go up and down completely randomly.

Pair Corralation between Zepp Health and Perfect Corp

Given the investment horizon of 90 days Zepp Health Corp is expected to under-perform the Perfect Corp. In addition to that, Zepp Health is 2.21 times more volatile than Perfect Corp. It trades about -0.05 of its total potential returns per unit of risk. Perfect Corp is currently generating about -0.06 per unit of volatility. If you would invest  203.00  in Perfect Corp on August 26, 2025 and sell it today you would lose (32.00) from holding Perfect Corp or give up 15.76% of portfolio value over 90 days.

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

Zepp Health Corp  vs.  Perfect Corp

Zepp Health Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Zepp Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Perfect Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Perfect Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Zepp Health and Perfect Corp

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

The idea behind Zepp Health Corp and Perfect 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.