Correlation Between Pembina Pipeline and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Hisense Home 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 Pembina Pipeline and Hisense Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and Hisense Home Appliances, you can compare the effects of market volatilities on Pembina Pipeline and Hisense Home 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 Pembina Pipeline with a short position of Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Hisense Home.
Diversification Opportunities for Pembina Pipeline and Hisense Home
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pembina and Hisense is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances and Pembina Pipeline 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 Pembina Pipeline Corp are associated (or correlated) with Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Hisense Home go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Hisense Home
Assuming the 90 days horizon Pembina Pipeline is expected to generate 3.15 times less return on investment than Hisense Home. But when comparing it to its historical volatility, Pembina Pipeline Corp is 4.19 times less risky than Hisense Home. It trades about 0.1 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Hisense Home Appliances on August 31, 2024 and sell it today you would earn a total of 158.00 from holding Hisense Home Appliances or generate 149.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Hisense Home Appliances
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Hisense Home Appliances |
Pembina Pipeline and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Hisense Home
The main advantage of trading using opposite Pembina Pipeline and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Pembina Pipeline vs. Superior Plus Corp | Pembina Pipeline vs. NMI Holdings | Pembina Pipeline vs. Origin Agritech | Pembina Pipeline vs. SIVERS SEMICONDUCTORS AB |
| Hisense Home vs. SERI INDUSTRIAL EO | Hisense Home vs. SOUTHWEST AIRLINES | Hisense Home vs. Gol Intelligent Airlines | Hisense Home vs. Scandinavian Tobacco Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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