Correlation Between KINGDEE INTL and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both KINGDEE INTL and Hemisphere 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 KINGDEE INTL and Hemisphere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGDEE INTL SOFTWA and Hemisphere Energy Corp, you can compare the effects of market volatilities on KINGDEE INTL and Hemisphere 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 KINGDEE INTL with a short position of Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGDEE INTL and Hemisphere Energy.
Diversification Opportunities for KINGDEE INTL and Hemisphere Energy
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KINGDEE and Hemisphere is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding KINGDEE INTL SOFTWA and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp and KINGDEE INTL 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 KINGDEE INTL SOFTWA are associated (or correlated) with Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of KINGDEE INTL i.e., KINGDEE INTL and Hemisphere Energy go up and down completely randomly.
Pair Corralation between KINGDEE INTL and Hemisphere Energy
Assuming the 90 days trading horizon KINGDEE INTL is expected to generate 59.64 times less return on investment than Hemisphere Energy. In addition to that, KINGDEE INTL is 2.13 times more volatile than Hemisphere Energy Corp. It trades about 0.0 of its total potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.13 per unit of volatility. If you would invest 72.00 in Hemisphere Energy Corp on September 2, 2024 and sell it today you would earn a total of 52.00 from holding Hemisphere Energy Corp or generate 72.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
KINGDEE INTL SOFTWA vs. Hemisphere Energy Corp
Performance |
| Timeline |
| KINGDEE INTL SOFTWA |
| Hemisphere Energy Corp |
KINGDEE INTL and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGDEE INTL and Hemisphere Energy
The main advantage of trading using opposite KINGDEE INTL and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGDEE INTL position performs unexpectedly, Hemisphere 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| KINGDEE INTL vs. PLAYWAY SA ZY 10 | KINGDEE INTL vs. KOOL2PLAY SA ZY | KINGDEE INTL vs. NTG Nordic Transport | KINGDEE INTL vs. Liberty Broadband |
| Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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