Correlation Between HEMISPHERE EGY and G8 EDUCATION
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and G8 EDUCATION 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 EGY and G8 EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and G8 EDUCATION, you can compare the effects of market volatilities on HEMISPHERE EGY and G8 EDUCATION 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 EGY with a short position of G8 EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and G8 EDUCATION.
Diversification Opportunities for HEMISPHERE EGY and G8 EDUCATION
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between HEMISPHERE and 3EAG is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and G8 EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G8 EDUCATION and HEMISPHERE EGY 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 EGY are associated (or correlated) with G8 EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G8 EDUCATION has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and G8 EDUCATION go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and G8 EDUCATION
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 0.71 times more return on investment than G8 EDUCATION. However, HEMISPHERE EGY is 1.41 times less risky than G8 EDUCATION. It trades about 0.18 of its potential returns per unit of risk. G8 EDUCATION is currently generating about 0.1 per unit of risk. If you would invest 121.00 in HEMISPHERE EGY on November 28, 2024 and sell it today you would earn a total of 6.00 from holding HEMISPHERE EGY or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HEMISPHERE EGY vs. G8 EDUCATION
Performance |
| Timeline |
| HEMISPHERE EGY |
| G8 EDUCATION |
HEMISPHERE EGY and G8 EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and G8 EDUCATION
The main advantage of trading using opposite HEMISPHERE EGY and G8 EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY position performs unexpectedly, G8 EDUCATION 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 G8 EDUCATION will offset losses from the drop in G8 EDUCATION's long position.| HEMISPHERE EGY vs. International Consolidated Airlines | HEMISPHERE EGY vs. SINGAPORE AIRLINES | HEMISPHERE EGY vs. SOUTHWEST AIRLINES | HEMISPHERE EGY vs. LEONS FURNITURE |
| G8 EDUCATION vs. CHINA TONTINE WINES | G8 EDUCATION vs. UNITED RENTALS | G8 EDUCATION vs. Treasury Wine Estates | G8 EDUCATION vs. Infrastrutture Wireless Italiane |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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