Correlation Between Hemisphere Energy and Western Copper
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Western Copper 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 Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy and Western Copper and, you can compare the effects of market volatilities on Hemisphere Energy and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Western Copper.
Diversification Opportunities for Hemisphere Energy and Western Copper
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hemisphere and Western is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Western Copper go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Western Copper
Assuming the 90 days horizon Hemisphere Energy is expected to generate 0.63 times more return on investment than Western Copper. However, Hemisphere Energy is 1.58 times less risky than Western Copper. It trades about 0.06 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 113.00 in Hemisphere Energy on October 30, 2024 and sell it today you would earn a total of 70.00 from holding Hemisphere Energy or generate 61.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy vs. Western Copper and
Performance |
| Timeline |
| Hemisphere Energy |
| Western Copper |
Hemisphere Energy and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Western Copper
The main advantage of trading using opposite Hemisphere Energy and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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