Correlation Between Hisense Home and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Hisense Home and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Hisense Home and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and DFS Furniture.
Diversification Opportunities for Hisense Home and DFS Furniture
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hisense and DFS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Hisense Home i.e., Hisense Home and DFS Furniture go up and down completely randomly.
Pair Corralation between Hisense Home and DFS Furniture
Assuming the 90 days horizon Hisense Home Appliances is expected to under-perform the DFS Furniture. In addition to that, Hisense Home is 1.24 times more volatile than DFS Furniture PLC. It trades about -0.13 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.01 per unit of volatility. If you would invest 158.00 in DFS Furniture PLC on August 29, 2024 and sell it today you would earn a total of 0.00 from holding DFS Furniture PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. DFS Furniture PLC
Performance |
| Timeline |
| Hisense Home Appliances |
| DFS Furniture PLC |
Hisense Home and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and DFS Furniture
The main advantage of trading using opposite Hisense Home and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Hisense Home vs. Superior Plus Corp | Hisense Home vs. NMI Holdings | Hisense Home vs. Origin Agritech | Hisense Home vs. SIVERS SEMICONDUCTORS AB |
| DFS Furniture vs. Sunny Optical Technology | DFS Furniture vs. CITY OFFICE REIT | DFS Furniture vs. Luckin Coffee | DFS Furniture vs. SWISS WATER DECAFFCOFFEE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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