Correlation Between BACKBONE Technology and Haier Smart
Can any of the company-specific risk be diversified away by investing in both BACKBONE Technology and Haier Smart 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 BACKBONE Technology and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BACKBONE Technology AG and Haier Smart Home, you can compare the effects of market volatilities on BACKBONE Technology and Haier Smart 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 BACKBONE Technology with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of BACKBONE Technology and Haier Smart.
Diversification Opportunities for BACKBONE Technology and Haier Smart
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BACKBONE and Haier is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BACKBONE Technology AG and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and BACKBONE Technology 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 BACKBONE Technology AG are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of BACKBONE Technology i.e., BACKBONE Technology and Haier Smart go up and down completely randomly.
Pair Corralation between BACKBONE Technology and Haier Smart
Assuming the 90 days trading horizon BACKBONE Technology is expected to generate 1.94 times less return on investment than Haier Smart. But when comparing it to its historical volatility, BACKBONE Technology AG is 2.42 times less risky than Haier Smart. It trades about 0.12 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Haier Smart Home on September 5, 2025 and sell it today you would earn a total of 18.00 from holding Haier Smart Home or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
BACKBONE Technology AG vs. Haier Smart Home
Performance |
| Timeline |
| BACKBONE Technology |
| Haier Smart Home |
BACKBONE Technology and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BACKBONE Technology and Haier Smart
The main advantage of trading using opposite BACKBONE Technology and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BACKBONE Technology position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| BACKBONE Technology vs. ONWARD MEDICAL BV | BACKBONE Technology vs. YATRA ONLINE DL 0001 | BACKBONE Technology vs. Avanos Medical | BACKBONE Technology vs. China Medical System |
| Haier Smart vs. RETAIL FOOD GROUP | Haier Smart vs. GameStop Corp | Haier Smart vs. JIAHUA STORES | Haier Smart vs. COSTCO WHOLESALE CDR |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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