Correlation Between Zepp Health and VOXX International

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

Diversification Opportunities for Zepp Health and VOXX International

0.75

Correlation Coefficient

Zepp Health  VOXX International

Poor diversification

The 3 months correlation between Zepp and VOXX is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Zepp Health Corp and VOXX International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOXX International 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 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 Zepp Health i.e., Zepp Health and VOXX International go up and down completely randomly.

Pair Corralation between Zepp Health and VOXX International

Given the investment horizon of 90 days Zepp Health Corp is expected to generate 0.82 times more return on investment than VOXX International. However, Zepp Health Corp is 1.22 times less risky than VOXX International. It trades about -0.36 of its potential returns per unit of risk. VOXX International is currently generating about -0.34 per unit of risk. If you would invest  101.00  in Zepp Health Corp on February 1, 2024 and sell it today you would lose (17.00) from holding Zepp Health Corp or give up 16.83% of portfolio value over 90 days.

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

Zepp Health Corp  vs.  VOXX International

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 inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 Zepp Health and VOXX International

The main advantage of trading using opposite Zepp Health and VOXX International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zepp Health 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 Zepp Health Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.