Correlation Between SHIP HEALTHCARE and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and HEMISPHERE EGY 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 SHIP HEALTHCARE and HEMISPHERE EGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and HEMISPHERE EGY, you can compare the effects of market volatilities on SHIP HEALTHCARE and HEMISPHERE EGY 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 SHIP HEALTHCARE with a short position of HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and HEMISPHERE EGY.
Diversification Opportunities for SHIP HEALTHCARE and HEMISPHERE EGY
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SHIP and HEMISPHERE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC are associated (or correlated) with HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and HEMISPHERE EGY
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the HEMISPHERE EGY. In addition to that, SHIP HEALTHCARE is 1.13 times more volatile than HEMISPHERE EGY. It trades about -0.08 of its total potential returns per unit of risk. HEMISPHERE EGY is currently generating about 0.14 per unit of volatility. If you would invest 124.00 in HEMISPHERE EGY on August 27, 2024 and sell it today you would earn a total of 6.00 from holding HEMISPHERE EGY or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. HEMISPHERE EGY
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| HEMISPHERE EGY |
SHIP HEALTHCARE and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and HEMISPHERE EGY
The main advantage of trading using opposite SHIP HEALTHCARE and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, HEMISPHERE EGY 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 HEMISPHERE EGY will offset losses from the drop in HEMISPHERE EGY's long position.| SHIP HEALTHCARE vs. INDOFOOD AGRI RES | SHIP HEALTHCARE vs. SIEM OFFSHORE NEW | SHIP HEALTHCARE vs. Dairy Farm International | SHIP HEALTHCARE vs. PACIFIC ONLINE |
| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Microsoft |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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