Correlation Between Hemisphere Energy and Surge Energy
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Surge Energy 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 Surge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy and Surge Energy, you can compare the effects of market volatilities on Hemisphere Energy and Surge Energy 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 Surge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Surge Energy.
Diversification Opportunities for Hemisphere Energy and Surge Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hemisphere and Surge is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge 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 Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Surge Energy go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Surge Energy
Assuming the 90 days horizon Hemisphere Energy is expected to generate 1.01 times more return on investment than Surge Energy. However, Hemisphere Energy is 1.01 times more volatile than Surge Energy. It trades about 0.0 of its potential returns per unit of risk. Surge Energy is currently generating about -0.07 per unit of risk. If you would invest 187.00 in Hemisphere Energy on August 30, 2024 and sell it today you would lose (1.00) from holding Hemisphere Energy or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hemisphere Energy vs. Surge Energy
Performance |
| Timeline |
| Hemisphere Energy |
| Surge Energy |
Hemisphere Energy and Surge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Surge Energy
The main advantage of trading using opposite Hemisphere Energy and Surge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Surge Energy 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 Surge Energy will offset losses from the drop in Surge Energy'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 |
| Surge Energy vs. CGX Energy | Surge Energy vs. Africa Oil Corp | Surge Energy vs. Africa Energy Corp | Surge Energy vs. Hemisphere 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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