Correlation Between Hisense Home and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both Hisense Home and CarsalesCom 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 CarsalesCom 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 CarsalesCom, you can compare the effects of market volatilities on Hisense Home and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and CarsalesCom.
Diversification Opportunities for Hisense Home and CarsalesCom
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hisense and CarsalesCom is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Hisense Home i.e., Hisense Home and CarsalesCom go up and down completely randomly.
Pair Corralation between Hisense Home and CarsalesCom
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.94 times more return on investment than CarsalesCom. However, Hisense Home is 1.94 times more volatile than CarsalesCom. It trades about 0.06 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.06 per unit of risk. If you would invest 301.00 in Hisense Home Appliances on October 26, 2024 and sell it today you would earn a total of 26.00 from holding Hisense Home Appliances or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. CarsalesCom
Performance |
| Timeline |
| Hisense Home Appliances |
| CarsalesCom |
Hisense Home and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and CarsalesCom
The main advantage of trading using opposite Hisense Home and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| Hisense Home vs. Eurasia Mining Plc | Hisense Home vs. Siamgas And Petrochemicals | Hisense Home vs. MAGNUM MINING EXP | Hisense Home vs. CEOTRONICS |
| CarsalesCom vs. Monument Mining Limited | CarsalesCom vs. Taylor Morrison Home | CarsalesCom vs. Hisense Home Appliances | CarsalesCom vs. Focus Home Interactive |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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