Correlation Between HEMISPHERE EGY and Transportadora
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and Transportadora 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 Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and Transportadora de Gas, you can compare the effects of market volatilities on HEMISPHERE EGY and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and Transportadora.
Diversification Opportunities for HEMISPHERE EGY and Transportadora
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEMISPHERE and Transportadora is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and Transportadora go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and Transportadora
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, HEMISPHERE EGY is 2.39 times less risky than Transportadora. The stock trades about -0.01 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,040 in Transportadora de Gas on August 30, 2024 and sell it today you would earn a total of 840.00 from holding Transportadora de Gas or generate 41.18% 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. Transportadora de Gas
Performance |
| Timeline |
| HEMISPHERE EGY |
| Transportadora de Gas |
HEMISPHERE EGY and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and Transportadora
The main advantage of trading using opposite HEMISPHERE EGY and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Superior Plus Corp | HEMISPHERE EGY vs. SIVERS SEMICONDUCTORS AB |
| Transportadora vs. China Datang | Transportadora vs. Stewart Information Services | Transportadora vs. SOLSTAD OFFSHORE NK | Transportadora vs. EIDESVIK OFFSHORE NK |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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