Correlation Between China BlueChemical and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and HEMISPHERE EGY 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 China BlueChemical and HEMISPHERE EGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and HEMISPHERE EGY, you can compare the effects of market volatilities on China BlueChemical and HEMISPHERE EGY 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 China BlueChemical with a short position of HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and HEMISPHERE EGY.
Diversification Opportunities for China BlueChemical and HEMISPHERE EGY
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and HEMISPHERE is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY and China BlueChemical 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 China BlueChemical are associated (or correlated) with HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of China BlueChemical i.e., China BlueChemical and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between China BlueChemical and HEMISPHERE EGY
Assuming the 90 days horizon China BlueChemical is expected to generate 3.57 times more return on investment than HEMISPHERE EGY. However, China BlueChemical is 3.57 times more volatile than HEMISPHERE EGY. It trades about 0.14 of its potential returns per unit of risk. HEMISPHERE EGY is currently generating about -0.04 per unit of risk. If you would invest 25.00 in China BlueChemical on October 14, 2024 and sell it today you would earn a total of 2.00 from holding China BlueChemical or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. HEMISPHERE EGY
Performance |
| Timeline |
| China BlueChemical |
| HEMISPHERE EGY |
China BlueChemical and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and HEMISPHERE EGY
The main advantage of trading using opposite China BlueChemical and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, HEMISPHERE EGY 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 HEMISPHERE EGY will offset losses from the drop in HEMISPHERE EGY's long position.| China BlueChemical vs. Keck Seng Investments | China BlueChemical vs. WisdomTree Investments | China BlueChemical vs. FORMPIPE SOFTWARE AB | China BlueChemical vs. SLR Investment Corp |
| HEMISPHERE EGY vs. Soken Chemical Engineering | HEMISPHERE EGY vs. Tencent Music Entertainment | HEMISPHERE EGY vs. China BlueChemical | HEMISPHERE EGY vs. Mitsubishi Gas Chemical |
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 CEOs Directory module to screen CEOs from public companies around the world.
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