Correlation Between HEMISPHERE EGY and NEXANS
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and NEXANS 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 NEXANS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and NEXANS, you can compare the effects of market volatilities on HEMISPHERE EGY and NEXANS 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 NEXANS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and NEXANS.
Diversification Opportunities for HEMISPHERE EGY and NEXANS
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEMISPHERE and NEXANS is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and NEXANS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS 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 NEXANS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and NEXANS go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and NEXANS
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to under-perform the NEXANS. In addition to that, HEMISPHERE EGY is 1.01 times more volatile than NEXANS. It trades about -0.11 of its total potential returns per unit of risk. NEXANS is currently generating about -0.07 per unit of volatility. If you would invest 10,620 in NEXANS on September 25, 2024 and sell it today you would lose (240.00) from holding NEXANS or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HEMISPHERE EGY vs. NEXANS
Performance |
| Timeline |
| HEMISPHERE EGY |
| NEXANS |
HEMISPHERE EGY and NEXANS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and NEXANS
The main advantage of trading using opposite HEMISPHERE EGY and NEXANS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY position performs unexpectedly, NEXANS 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 NEXANS will offset losses from the drop in NEXANS's long position.| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Microsoft | HEMISPHERE EGY vs. Microsoft |
| NEXANS vs. Computershare Limited | NEXANS vs. Highlight Communications AG | NEXANS vs. HEMISPHERE EGY | NEXANS vs. Broadridge Financial Solutions |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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