Correlation Between HEMISPHERE EGY and NIKE
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and NIKE 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 NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and NIKE Inc, you can compare the effects of market volatilities on HEMISPHERE EGY and NIKE 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 NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and NIKE.
Diversification Opportunities for HEMISPHERE EGY and NIKE
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between HEMISPHERE and NIKE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc 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 NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and NIKE go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and NIKE
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 0.76 times more return on investment than NIKE. However, HEMISPHERE EGY is 1.32 times less risky than NIKE. It trades about 0.09 of its potential returns per unit of risk. NIKE Inc is currently generating about -0.03 per unit of risk. If you would invest 68.00 in HEMISPHERE EGY on September 26, 2024 and sell it today you would earn a total of 55.00 from holding HEMISPHERE EGY or generate 80.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEMISPHERE EGY vs. NIKE Inc
Performance |
| Timeline |
| HEMISPHERE EGY |
| NIKE Inc |
HEMISPHERE EGY and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and NIKE
The main advantage of trading using opposite HEMISPHERE EGY and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY position performs unexpectedly, NIKE 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 NIKE will offset losses from the drop in NIKE's long position.| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Microsoft | HEMISPHERE EGY vs. Microsoft |
| NIKE vs. T MOBILE US | NIKE vs. HEMISPHERE EGY | NIKE vs. Iridium Communications | NIKE vs. Entravision Communications |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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