Correlation Between HomeToGo and Sempra
Can any of the company-specific risk be diversified away by investing in both HomeToGo and Sempra 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 HomeToGo and Sempra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Sempra, you can compare the effects of market volatilities on HomeToGo and Sempra 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 HomeToGo with a short position of Sempra. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Sempra.
Diversification Opportunities for HomeToGo and Sempra
Very weak diversification
The 3 months correlation between HomeToGo and Sempra is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Sempra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempra and HomeToGo 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 HomeToGo SE are associated (or correlated) with Sempra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempra has no effect on the direction of HomeToGo i.e., HomeToGo and Sempra go up and down completely randomly.
Pair Corralation between HomeToGo and Sempra
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the Sempra. In addition to that, HomeToGo is 1.32 times more volatile than Sempra. It trades about -0.06 of its total potential returns per unit of risk. Sempra is currently generating about 0.31 per unit of volatility. If you would invest 7,652 in Sempra on September 1, 2024 and sell it today you would earn a total of 1,244 from holding Sempra or generate 16.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HomeToGo SE vs. Sempra
Performance |
| Timeline |
| HomeToGo SE |
| Sempra |
HomeToGo and Sempra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Sempra
The main advantage of trading using opposite HomeToGo and Sempra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, Sempra 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 Sempra will offset losses from the drop in Sempra's long position.| HomeToGo vs. Alphabet Class A | HomeToGo vs. Alphabet Class A | HomeToGo vs. Meta Platforms | HomeToGo vs. Tencent Holdings |
| Sempra vs. National Beverage Corp | Sempra vs. G8 EDUCATION | Sempra vs. Lifeway Foods | Sempra vs. CN MODERN DAIRY |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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