Correlation Between Hisense Home and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both Hisense Home and CENTURIA OFFICE 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 Hisense Home and CENTURIA OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Hisense Home and CENTURIA OFFICE 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 Hisense Home with a short position of CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and CENTURIA OFFICE.
Diversification Opportunities for Hisense Home and CENTURIA OFFICE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hisense and CENTURIA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT and Hisense Home 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 Hisense Home Appliances are associated (or correlated) with CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Hisense Home i.e., Hisense Home and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between Hisense Home and CENTURIA OFFICE
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 2.76 times more return on investment than CENTURIA OFFICE. However, Hisense Home is 2.76 times more volatile than CENTURIA OFFICE REIT. It trades about 0.07 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.02 per unit of risk. If you would invest 106.00 in Hisense Home Appliances on August 31, 2024 and sell it today you would earn a total of 158.00 from holding Hisense Home Appliances or generate 149.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
Hisense Home Appliances vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| Hisense Home Appliances |
| CENTURIA OFFICE REIT |
Hisense Home and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and CENTURIA OFFICE
The main advantage of trading using opposite Hisense Home and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| Hisense Home vs. SERI INDUSTRIAL EO | Hisense Home vs. SOUTHWEST AIRLINES | Hisense Home vs. Gol Intelligent Airlines | Hisense Home vs. Scandinavian Tobacco Group |
| CENTURIA OFFICE vs. MHP Hotel AG | CENTURIA OFFICE vs. Playa Hotels Resorts | CENTURIA OFFICE vs. InterContinental Hotels Group | CENTURIA OFFICE vs. Meli Hotels International |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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