Correlation Between Séché Environnement and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both Séché Environnement 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 Séché Environnement and Hemisphere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sch Environnement SA and Hemisphere Energy Corp, you can compare the effects of market volatilities on Séché Environnement 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 Séché Environnement with a short position of Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and Hemisphere Energy.
Diversification Opportunities for Séché Environnement and Hemisphere Energy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Séché and Hemisphere is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA 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 Séché Environnement 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 Sch Environnement SA 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 Séché Environnement i.e., Séché Environnement and Hemisphere Energy go up and down completely randomly.
Pair Corralation between Séché Environnement and Hemisphere Energy
Assuming the 90 days horizon Sch Environnement SA is expected to generate 1.24 times more return on investment than Hemisphere Energy. However, Séché Environnement is 1.24 times more volatile than Hemisphere Energy Corp. It trades about 0.24 of its potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.09 per unit of risk. If you would invest 7,480 in Sch Environnement SA on October 16, 2024 and sell it today you would earn a total of 420.00 from holding Sch Environnement SA or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. Hemisphere Energy Corp
Performance |
| Timeline |
| Séché Environnement |
| Hemisphere Energy Corp |
Séché Environnement and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and Hemisphere Energy
The main advantage of trading using opposite Séché Environnement and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché Environnement 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.| Séché Environnement vs. GRENKELEASING Dusseldorf | Séché Environnement vs. RCS MediaGroup SpA | Séché Environnement vs. Tyson Foods | Séché Environnement vs. Townsquare Media |
| Hemisphere Energy vs. COFCO Joycome Foods | Hemisphere Energy vs. STEEL DYNAMICS | Hemisphere Energy vs. Tyson Foods | Hemisphere Energy vs. Sch Environnement SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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