Correlation Between Hemisphere Energy and Air Canada
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Air Canada 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 Hemisphere Energy and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy and Air Canada, you can compare the effects of market volatilities on Hemisphere Energy and Air Canada 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 Hemisphere Energy with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Air Canada.
Diversification Opportunities for Hemisphere Energy and Air Canada
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hemisphere and Air is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and Hemisphere Energy 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 Hemisphere Energy are associated (or correlated) with Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Air Canada go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Air Canada
Assuming the 90 days horizon Hemisphere Energy is expected to generate 0.96 times more return on investment than Air Canada. However, Hemisphere Energy is 1.04 times less risky than Air Canada. It trades about 0.09 of its potential returns per unit of risk. Air Canada is currently generating about 0.03 per unit of risk. If you would invest 109.00 in Hemisphere Energy on August 31, 2024 and sell it today you would earn a total of 79.00 from holding Hemisphere Energy or generate 72.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy vs. Air Canada
Performance |
| Timeline |
| Hemisphere Energy |
| Air Canada |
Hemisphere Energy and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Air Canada
The main advantage of trading using opposite Hemisphere Energy and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Air Canada 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 Air Canada will offset losses from the drop in Air Canada's long position.| Hemisphere Energy vs. InPlay Oil Corp | Hemisphere Energy vs. Pine Cliff Energy | Hemisphere Energy vs. Journey Energy | Hemisphere Energy vs. Yangarra Resources |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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