Correlation Between AES and Viomi Technology
Can any of the company-specific risk be diversified away by investing in both AES and Viomi Technology 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 AES and Viomi Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The AES and Viomi Technology ADR, you can compare the effects of market volatilities on AES and Viomi Technology 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 AES with a short position of Viomi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Viomi Technology.
Diversification Opportunities for AES and Viomi Technology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AES and Viomi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Viomi Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viomi Technology ADR and AES 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 The AES are associated (or correlated) with Viomi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viomi Technology ADR has no effect on the direction of AES i.e., AES and Viomi Technology go up and down completely randomly.
Pair Corralation between AES and Viomi Technology
Considering the 90-day investment horizon AES is expected to generate 3.15 times less return on investment than Viomi Technology. But when comparing it to its historical volatility, The AES is 2.72 times less risky than Viomi Technology. It trades about 0.18 of its potential returns per unit of risk. Viomi Technology ADR is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Viomi Technology ADR on May 28, 2025 and sell it today you would earn a total of 222.00 from holding Viomi Technology ADR or generate 162.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The AES vs. Viomi Technology ADR
Performance |
| Timeline |
| AES |
| Viomi Technology ADR |
AES and Viomi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES and Viomi Technology
The main advantage of trading using opposite AES and Viomi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, Viomi Technology 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 Viomi Technology will offset losses from the drop in Viomi Technology's long position.The idea behind The AES and Viomi Technology ADR 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.| Viomi Technology vs. Virco Manufacturing | Viomi Technology vs. Hamilton Beach Brands | Viomi Technology vs. Crown Crafts | Viomi Technology vs. Energy Focu |
Check out your portfolio center.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.
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