Correlation Between Hisense Home and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Rheinmetall 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 Rheinmetall 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 Rheinmetall AG, you can compare the effects of market volatilities on Hisense Home and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Rheinmetall.
Diversification Opportunities for Hisense Home and Rheinmetall
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hisense and Rheinmetall is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of Hisense Home i.e., Hisense Home and Rheinmetall go up and down completely randomly.
Pair Corralation between Hisense Home and Rheinmetall
If you would invest 330.00 in Hisense Home Appliances on November 6, 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 | 0.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. Rheinmetall AG
Performance |
| Timeline |
| Hisense Home Appliances |
| Rheinmetall AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Hisense Home and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Rheinmetall
The main advantage of trading using opposite Hisense Home and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| Hisense Home vs. Alaska Air Group | Hisense Home vs. FIREWEED METALS P | Hisense Home vs. DAIDO METAL TD | Hisense Home vs. CORNISH METALS INC |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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