Correlation Between Hemisphere Energy and Great West
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy and Great West Lifeco, you can compare the effects of market volatilities on Hemisphere Energy and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Great West.
Diversification Opportunities for Hemisphere Energy and Great West
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hemisphere and Great is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Great West go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Great West
Assuming the 90 days horizon Hemisphere Energy is expected to generate 5.78 times more return on investment than Great West. However, Hemisphere Energy is 5.78 times more volatile than Great West Lifeco. It trades about 0.06 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.09 per unit of risk. If you would invest 184.00 in Hemisphere Energy on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Hemisphere Energy or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy vs. Great West Lifeco
Performance |
| Timeline |
| Hemisphere Energy |
| Great West Lifeco |
Hemisphere Energy and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Great West
The main advantage of trading using opposite Hemisphere Energy and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Richelieu Hardware | Great West vs. Cogeco Communications | Great West vs. Quisitive Technology Solutions | Great West vs. Rogers Communications |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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