Correlation Between Hemisphere Energy and Pine Cliff
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Pine Cliff 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 Pine Cliff into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy and Pine Cliff Energy, you can compare the effects of market volatilities on Hemisphere Energy and Pine Cliff 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 Pine Cliff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Pine Cliff.
Diversification Opportunities for Hemisphere Energy and Pine Cliff
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hemisphere and Pine is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Pine Cliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pine Cliff Energy 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 Pine Cliff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pine Cliff Energy has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Pine Cliff go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Pine Cliff
Assuming the 90 days horizon Hemisphere Energy is expected to generate 0.8 times more return on investment than Pine Cliff. However, Hemisphere Energy is 1.24 times less risky than Pine Cliff. It trades about 0.12 of its potential returns per unit of risk. Pine Cliff Energy is currently generating about -0.06 per unit of risk. If you would invest 114.00 in Hemisphere Energy on September 2, 2024 and sell it today you would earn a total of 74.00 from holding Hemisphere Energy or generate 64.91% 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. Pine Cliff Energy
Performance |
| Timeline |
| Hemisphere Energy |
| Pine Cliff Energy |
Hemisphere Energy and Pine Cliff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Pine Cliff
The main advantage of trading using opposite Hemisphere Energy and Pine Cliff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Pine Cliff 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 Pine Cliff will offset losses from the drop in Pine Cliff'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 |
| Pine Cliff vs. Gear Energy | Pine Cliff vs. Headwater Exploration | Pine Cliff vs. Cardinal Energy | Pine Cliff vs. Journey Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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