Correlation Between SAFETY MEDICAL and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL and HEMISPHERE EGY 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 SAFETY MEDICAL and HEMISPHERE EGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and HEMISPHERE EGY, you can compare the effects of market volatilities on SAFETY MEDICAL and HEMISPHERE EGY 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 SAFETY MEDICAL with a short position of HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and HEMISPHERE EGY.
Diversification Opportunities for SAFETY MEDICAL and HEMISPHERE EGY
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAFETY and HEMISPHERE is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY and SAFETY MEDICAL 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 SAFETY MEDICAL PROD are associated (or correlated) with HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of SAFETY MEDICAL i.e., SAFETY MEDICAL and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and HEMISPHERE EGY
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to under-perform the HEMISPHERE EGY. In addition to that, SAFETY MEDICAL is 1.57 times more volatile than HEMISPHERE EGY. It trades about -0.14 of its total potential returns per unit of risk. HEMISPHERE EGY is currently generating about 0.11 per unit of volatility. If you would invest 101.00 in HEMISPHERE EGY on September 2, 2024 and sell it today you would earn a total of 25.00 from holding HEMISPHERE EGY or generate 24.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. HEMISPHERE EGY
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| HEMISPHERE EGY |
SAFETY MEDICAL and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and HEMISPHERE EGY
The main advantage of trading using opposite SAFETY MEDICAL and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL position performs unexpectedly, HEMISPHERE EGY 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 EGY will offset losses from the drop in HEMISPHERE EGY's long position.| SAFETY MEDICAL vs. SIVERS SEMICONDUCTORS AB | SAFETY MEDICAL vs. Darden Restaurants | SAFETY MEDICAL vs. Reliance Steel Aluminum | SAFETY MEDICAL vs. Q2M Managementberatung AG |
| HEMISPHERE EGY vs. SIVERS SEMICONDUCTORS AB | HEMISPHERE EGY vs. Darden Restaurants | HEMISPHERE EGY vs. Reliance Steel Aluminum | HEMISPHERE EGY vs. Q2M Managementberatung AG |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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