Correlation Between Hisense Home and AP Mller
Can any of the company-specific risk be diversified away by investing in both Hisense Home and AP Mller 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 AP Mller 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 AP Mller , you can compare the effects of market volatilities on Hisense Home and AP Mller 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 AP Mller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and AP Mller.
Diversification Opportunities for Hisense Home and AP Mller
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hisense and DP4A is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of Hisense Home i.e., Hisense Home and AP Mller go up and down completely randomly.
Pair Corralation between Hisense Home and AP Mller
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.37 times more return on investment than AP Mller. However, Hisense Home is 1.37 times more volatile than AP Mller . It trades about 0.13 of its potential returns per unit of risk. AP Mller is currently generating about -0.14 per unit of risk. If you would invest 297.00 in Hisense Home Appliances on October 12, 2024 and sell it today you would earn a total of 22.00 from holding Hisense Home Appliances or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. AP Mller
Performance |
| Timeline |
| Hisense Home Appliances |
| AP Mller |
Hisense Home and AP Mller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and AP Mller
The main advantage of trading using opposite Hisense Home and AP Mller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, AP Mller 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 AP Mller will offset losses from the drop in AP Mller's long position.| Hisense Home vs. Man Wah Holdings | Hisense Home vs. Superior Plus Corp | Hisense Home vs. NMI Holdings | Hisense Home vs. SIVERS SEMICONDUCTORS AB |
| AP Mller vs. alstria office REIT AG | AP Mller vs. Hisense Home Appliances | AP Mller vs. CarsalesCom | AP Mller vs. Addus HomeCare |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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