Correlation Between Hemisphere Energy and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Lundin Energy 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 Energy and Lundin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy Corp and Lundin Energy AB, you can compare the effects of market volatilities on Hemisphere Energy and Lundin Energy 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 Energy with a short position of Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Lundin Energy.
Diversification Opportunities for Hemisphere Energy and Lundin Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hemisphere and Lundin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy Corp and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB and Hemisphere Energy 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 Energy Corp are associated (or correlated) with Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Lundin Energy go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Lundin Energy
Assuming the 90 days trading horizon Hemisphere Energy Corp is expected to generate 0.53 times more return on investment than Lundin Energy. However, Hemisphere Energy Corp is 1.88 times less risky than Lundin Energy. It trades about 0.09 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.03 per unit of risk. If you would invest 70.00 in Hemisphere Energy Corp on September 4, 2024 and sell it today you would earn a total of 54.00 from holding Hemisphere Energy Corp or generate 77.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy Corp vs. Lundin Energy AB
Performance |
| Timeline |
| Hemisphere Energy Corp |
| Lundin Energy AB |
Hemisphere Energy and Lundin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Lundin Energy
The main advantage of trading using opposite Hemisphere Energy and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Lundin Energy 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 Lundin Energy will offset losses from the drop in Lundin Energy's long position.| Hemisphere Energy vs. MGIC INVESTMENT | Hemisphere Energy vs. Singapore Airlines Limited | Hemisphere Energy vs. PennantPark Investment | Hemisphere Energy vs. AEGEAN AIRLINES |
| Lundin Energy vs. NXP Semiconductors NV | Lundin Energy vs. Strategic Education | Lundin Energy vs. COMMERCIAL VEHICLE | Lundin Energy vs. Cars Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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