Correlation Between Hemisphere Energy and WesCan Energy
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and WesCan 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 WesCan 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 WesCan Energy Corp, you can compare the effects of market volatilities on Hemisphere Energy and WesCan 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 WesCan Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and WesCan Energy.
Diversification Opportunities for Hemisphere Energy and WesCan Energy
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hemisphere and WesCan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and WesCan Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesCan Energy Corp 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 WesCan Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesCan Energy Corp has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and WesCan Energy go up and down completely randomly.
Pair Corralation between Hemisphere Energy and WesCan Energy
Assuming the 90 days horizon Hemisphere Energy is expected to generate 1.12 times less return on investment than WesCan Energy. But when comparing it to its historical volatility, Hemisphere Energy is 2.41 times less risky than WesCan Energy. It trades about 0.06 of its potential returns per unit of risk. WesCan Energy Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9.00 in WesCan Energy Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding WesCan Energy Corp or generate 0.0% 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. WesCan Energy Corp
Performance |
| Timeline |
| Hemisphere Energy |
| WesCan Energy Corp |
Hemisphere Energy and WesCan Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and WesCan Energy
The main advantage of trading using opposite Hemisphere Energy and WesCan Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, WesCan 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 WesCan Energy will offset losses from the drop in WesCan 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 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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