Correlation Between PAX Global and Hisense Home
Can any of the company-specific risk be diversified away by investing in both PAX Global 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 PAX Global and Hisense Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAX Global Technology and Hisense Home Appliances, you can compare the effects of market volatilities on PAX Global 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 PAX Global with a short position of Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAX Global and Hisense Home.
Diversification Opportunities for PAX Global and Hisense Home
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between PAX and Hisense is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PAX Global Technology 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 PAX Global 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 PAX Global Technology 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 PAX Global i.e., PAX Global and Hisense Home go up and down completely randomly.
Pair Corralation between PAX Global and Hisense Home
Assuming the 90 days horizon PAX Global is expected to generate 9.83 times less return on investment than Hisense Home. In addition to that, PAX Global is 1.26 times more volatile than Hisense Home Appliances. It trades about 0.02 of its total potential returns per unit of risk. Hisense Home Appliances is currently generating about 0.22 per unit of volatility. If you would invest 300.00 in Hisense Home Appliances on October 25, 2024 and sell it today you would earn a total of 32.00 from holding Hisense Home Appliances or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PAX Global Technology vs. Hisense Home Appliances
Performance |
| Timeline |
| PAX Global Technology |
| Hisense Home Appliances |
PAX Global and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAX Global and Hisense Home
The main advantage of trading using opposite PAX Global and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAX Global 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.| PAX Global vs. Hisense Home Appliances | PAX Global vs. Focus Home Interactive | PAX Global vs. ONWARD MEDICAL BV | PAX Global vs. CAIRN HOMES EO |
| Hisense Home vs. CHRYSALIS INVESTMENTS LTD | Hisense Home vs. AOYAMA TRADING | Hisense Home vs. Harmony Gold Mining | Hisense Home vs. Globex Mining Enterprises |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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