Correlation Between Hisense Home and Hongkong
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on Hisense Home and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Hongkong.
Diversification Opportunities for Hisense Home and Hongkong
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hisense and Hongkong is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Hisense Home i.e., Hisense Home and Hongkong go up and down completely randomly.
Pair Corralation between Hisense Home and Hongkong
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 2.06 times more return on investment than Hongkong. However, Hisense Home is 2.06 times more volatile than The Hongkong and. It trades about 0.02 of its potential returns per unit of risk. The Hongkong and is currently generating about -0.23 per unit of risk. If you would invest 330.00 in Hisense Home Appliances on November 7, 2024 and sell it today you would earn a total of 1.00 from holding Hisense Home Appliances or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Hisense Home Appliances vs. The Hongkong and
Performance |
| Timeline |
| Hisense Home Appliances |
| The Hongkong |
Hisense Home and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Hongkong
The main advantage of trading using opposite Hisense Home and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| Hisense Home vs. NTG Nordic Transport | Hisense Home vs. bet at home AG | Hisense Home vs. Autohome ADR | Hisense Home vs. Addus HomeCare |
| Hongkong vs. Marriott International | Hongkong vs. Hilton Worldwide Holdings | Hongkong vs. H World Group | Hongkong vs. Hyatt Hotels |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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