Correlation Between Hisense Home and GLG LIFE
Can any of the company-specific risk be diversified away by investing in both Hisense Home and GLG LIFE 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 GLG LIFE 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 GLG LIFE TECH, you can compare the effects of market volatilities on Hisense Home and GLG LIFE 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 GLG LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and GLG LIFE.
Diversification Opportunities for Hisense Home and GLG LIFE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hisense and GLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and GLG LIFE TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLG LIFE TECH 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 GLG LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLG LIFE TECH has no effect on the direction of Hisense Home i.e., Hisense Home and GLG LIFE go up and down completely randomly.
Pair Corralation between Hisense Home and GLG LIFE
Assuming the 90 days horizon Hisense Home is expected to generate 7.33 times less return on investment than GLG LIFE. But when comparing it to its historical volatility, Hisense Home Appliances is 11.56 times less risky than GLG LIFE. It trades about 0.1 of its potential returns per unit of risk. GLG LIFE TECH is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.75 in GLG LIFE TECH on October 25, 2024 and sell it today you would earn a total of 0.25 from holding GLG LIFE TECH or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. GLG LIFE TECH
Performance |
| Timeline |
| Hisense Home Appliances |
| GLG LIFE TECH |
Hisense Home and GLG LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and GLG LIFE
The main advantage of trading using opposite Hisense Home and GLG LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, GLG LIFE 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 GLG LIFE will offset losses from the drop in GLG LIFE's long position.| Hisense Home vs. Eurasia Mining Plc | Hisense Home vs. Siamgas And Petrochemicals | Hisense Home vs. MAGNUM MINING EXP | Hisense Home vs. CEOTRONICS |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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