Correlation Between Turtle Beach and Zepp Health

Can any of the company-specific risk be diversified away by investing in both Turtle Beach and Zepp Health 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 Turtle Beach and Zepp Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turtle Beach Corp and Zepp Health Corp, you can compare the effects of market volatilities on Turtle Beach and Zepp Health 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 Turtle Beach with a short position of Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turtle Beach and Zepp Health.

Diversification Opportunities for Turtle Beach and Zepp Health

0.01

Correlation Coefficient

Turtle Beach  Zepp Health

Significant diversification

The 3 months correlation between Turtle and Zepp is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Turtle Beach Corp and Zepp Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zepp Health Corp and Turtle Beach 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 Turtle Beach Corp are associated (or correlated) with Zepp Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zepp Health Corp has no effect on the direction of Turtle Beach i.e., Turtle Beach and Zepp Health go up and down completely randomly.

Pair Corralation between Turtle Beach and Zepp Health

Given the investment horizon of 90 days Turtle Beach Corp is expected to generate 0.53 times more return on investment than Zepp Health. However, Turtle Beach Corp is 1.9 times less risky than Zepp Health. It trades about 0.09 of its potential returns per unit of risk. Zepp Health Corp is currently generating about 0.03 per unit of risk. If you would invest  1,496  in Turtle Beach Corp on September 2, 2024 and sell it today you would earn a total of  235.00  from holding Turtle Beach Corp or generate 15.71% return on investment over 90 days.

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

Turtle Beach Corp  vs.  Zepp Health Corp

Turtle Beach Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turtle Beach Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Turtle Beach reported solid returns over the last few months and may actually be approaching a breakup point.

Zepp Health Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zepp Health Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Zepp Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Turtle Beach and Zepp Health

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

The idea behind Turtle Beach Corp and Zepp Health 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.