Correlation Between Hisense Home and Air Lease
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Air Lease 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 Air Lease 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 Air Lease, you can compare the effects of market volatilities on Hisense Home and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Air Lease.
Diversification Opportunities for Hisense Home and Air Lease
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hisense and Air is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Hisense Home i.e., Hisense Home and Air Lease go up and down completely randomly.
Pair Corralation between Hisense Home and Air Lease
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 2.52 times more return on investment than Air Lease. However, Hisense Home is 2.52 times more volatile than Air Lease. It trades about 0.06 of its potential returns per unit of risk. Air Lease is currently generating about 0.1 per unit of risk. If you would invest 269.00 in Hisense Home Appliances on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Hisense Home Appliances or generate 22.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. Air Lease
Performance |
| Timeline |
| Hisense Home Appliances |
| Air Lease |
Hisense Home and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Air Lease
The main advantage of trading using opposite Hisense Home and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| Hisense Home vs. Tempur Sealy International | Hisense Home vs. Howden Joinery Group | Hisense Home vs. Superior Plus Corp | Hisense Home vs. Origin Agritech |
| Air Lease vs. Jacquet Metal Service | Air Lease vs. Penn National Gaming | Air Lease vs. PLAYMATES TOYS | Air Lease vs. CONTAGIOUS GAMING INC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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