Correlation Between Hisense Home and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both Hisense Home and SEALED AIR 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 SEALED AIR 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 SEALED AIR , you can compare the effects of market volatilities on Hisense Home and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and SEALED AIR.
Diversification Opportunities for Hisense Home and SEALED AIR
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hisense and SEALED is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of Hisense Home i.e., Hisense Home and SEALED AIR go up and down completely randomly.
Pair Corralation between Hisense Home and SEALED AIR
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 2.36 times more return on investment than SEALED AIR. However, Hisense Home is 2.36 times more volatile than SEALED AIR . It trades about 0.12 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.16 per unit of risk. If you would invest 312.00 in Hisense Home Appliances on November 3, 2024 and sell it today you would earn a total of 19.00 from holding Hisense Home Appliances or generate 6.09% 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. SEALED AIR
Performance |
| Timeline |
| Hisense Home Appliances |
| SEALED AIR |
Hisense Home and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and SEALED AIR
The main advantage of trading using opposite Hisense Home and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| Hisense Home vs. PENN NATL GAMING | Hisense Home vs. GREENX METALS LTD | Hisense Home vs. PLAYMATES TOYS | Hisense Home vs. MCEWEN MINING 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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