Correlation Between HEMISPHERE EGY and Jernimo Martins
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and Jernimo Martins 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 Jernimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and Jernimo Martins SGPS, you can compare the effects of market volatilities on HEMISPHERE EGY and Jernimo Martins 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 Jernimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and Jernimo Martins.
Diversification Opportunities for HEMISPHERE EGY and Jernimo Martins
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEMISPHERE and Jernimo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and Jernimo Martins SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jernimo Martins SGPS 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 Jernimo Martins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jernimo Martins SGPS has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and Jernimo Martins go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and Jernimo Martins
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 1.36 times more return on investment than Jernimo Martins. However, HEMISPHERE EGY is 1.36 times more volatile than Jernimo Martins SGPS. It trades about 0.09 of its potential returns per unit of risk. Jernimo Martins SGPS is currently generating about 0.07 per unit of risk. If you would invest 122.00 in HEMISPHERE EGY on September 19, 2024 and sell it today you would earn a total of 4.00 from holding HEMISPHERE EGY or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEMISPHERE EGY vs. Jernimo Martins SGPS
Performance |
| Timeline |
| HEMISPHERE EGY |
| Jernimo Martins SGPS |
HEMISPHERE EGY and Jernimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and Jernimo Martins
The main advantage of trading using opposite HEMISPHERE EGY and Jernimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY position performs unexpectedly, Jernimo Martins 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 Jernimo Martins will offset losses from the drop in Jernimo Martins' long position.| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc |
| Jernimo Martins vs. Verizon Communications | Jernimo Martins vs. Postal Savings Bank | Jernimo Martins vs. HEMISPHERE EGY | Jernimo Martins vs. SEI INVESTMENTS |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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