Correlation Between Hisense Home and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Stag Industrial 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 Stag Industrial 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 Stag Industrial, you can compare the effects of market volatilities on Hisense Home and Stag Industrial 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 Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Stag Industrial.
Diversification Opportunities for Hisense Home and Stag Industrial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hisense and Stag is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial 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 Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of Hisense Home i.e., Hisense Home and Stag Industrial go up and down completely randomly.
Pair Corralation between Hisense Home and Stag Industrial
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 3.31 times more return on investment than Stag Industrial. However, Hisense Home is 3.31 times more volatile than Stag Industrial. It trades about 0.09 of its potential returns per unit of risk. Stag Industrial is currently generating about 0.0 per unit of risk. If you would invest 132.00 in Hisense Home Appliances on October 16, 2024 and sell it today you would earn a total of 194.00 from holding Hisense Home Appliances or generate 146.97% 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. Stag Industrial
Performance |
| Timeline |
| Hisense Home Appliances |
| Stag Industrial |
Hisense Home and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Stag Industrial
The main advantage of trading using opposite Hisense Home and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Stag Industrial 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 Stag Industrial will offset losses from the drop in Stag Industrial's long position.| Hisense Home vs. Performance Food Group | Hisense Home vs. CEOTRONICS | Hisense Home vs. United Natural Foods | Hisense Home vs. SENECA FOODS A |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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