Correlation Between Hisense Home and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Hisense Home and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Superior Plus.
Diversification Opportunities for Hisense Home and Superior Plus
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hisense and Superior is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Hisense Home i.e., Hisense Home and Superior Plus go up and down completely randomly.
Pair Corralation between Hisense Home and Superior Plus
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 2.07 times more return on investment than Superior Plus. However, Hisense Home is 2.07 times more volatile than Superior Plus Corp. It trades about 0.02 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.07 per unit of risk. If you would invest 280.00 in Hisense Home Appliances on August 31, 2024 and sell it today you would lose (17.00) from holding Hisense Home Appliances or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Hisense Home Appliances vs. Superior Plus Corp
Performance |
| Timeline |
| Hisense Home Appliances |
| Superior Plus Corp |
Hisense Home and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Superior Plus
The main advantage of trading using opposite Hisense Home and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' 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 |
| Superior Plus vs. BROADSTNET LEADL 00025 | Superior Plus vs. Mitsubishi Materials | Superior Plus vs. Martin Marietta Materials | Superior Plus vs. Summit Materials |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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