Correlation Between Parkson Retail and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both Parkson Retail and Hemisphere 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 Parkson Retail and Hemisphere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkson Retail Group and Hemisphere Energy Corp, you can compare the effects of market volatilities on Parkson Retail and Hemisphere 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 Parkson Retail with a short position of Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkson Retail and Hemisphere Energy.
Diversification Opportunities for Parkson Retail and Hemisphere Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Parkson and Hemisphere is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Parkson Retail Group and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp and Parkson Retail 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 Parkson Retail Group are associated (or correlated) with Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of Parkson Retail i.e., Parkson Retail and Hemisphere Energy go up and down completely randomly.
Pair Corralation between Parkson Retail and Hemisphere Energy
Assuming the 90 days trading horizon Parkson Retail Group is expected to generate 7.5 times more return on investment than Hemisphere Energy. However, Parkson Retail is 7.5 times more volatile than Hemisphere Energy Corp. It trades about 0.06 of its potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.06 per unit of risk. If you would invest 1.25 in Parkson Retail Group on November 27, 2024 and sell it today you would lose (0.45) from holding Parkson Retail Group or give up 36.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parkson Retail Group vs. Hemisphere Energy Corp
Performance |
| Timeline |
| Parkson Retail Group |
| Hemisphere Energy Corp |
Parkson Retail and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkson Retail and Hemisphere Energy
The main advantage of trading using opposite Parkson Retail and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkson Retail position performs unexpectedly, Hemisphere 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| Parkson Retail vs. Aeon Co | Parkson Retail vs. Shoprite Holdings Limited | Parkson Retail vs. Dillards | Parkson Retail vs. Macys Inc |
| Hemisphere Energy vs. Burlington Stores | Hemisphere Energy vs. COSTCO WHOLESALE CDR | Hemisphere Energy vs. Fuji Media Holdings | Hemisphere Energy vs. PARKEN Sport Entertainment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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