Correlation Between SEALED AIR and Hisense Home
Can any of the company-specific risk be diversified away by investing in both SEALED AIR 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 SEALED AIR and Hisense Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and Hisense Home Appliances, you can compare the effects of market volatilities on SEALED AIR 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 SEALED AIR with a short position of Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and Hisense Home.
Diversification Opportunities for SEALED AIR and Hisense Home
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SEALED and Hisense is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR 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 SEALED AIR 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 SEALED AIR 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 SEALED AIR i.e., SEALED AIR and Hisense Home go up and down completely randomly.
Pair Corralation between SEALED AIR and Hisense Home
Assuming the 90 days trading horizon SEALED AIR is expected to under-perform the Hisense Home. But the stock apears to be less risky and, when comparing its historical volatility, SEALED AIR is 2.78 times less risky than Hisense Home. The stock trades about -0.36 of its potential returns per unit of risk. The Hisense Home Appliances is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 292.00 in Hisense Home Appliances on October 16, 2024 and sell it today you would earn a total of 34.00 from holding Hisense Home Appliances or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
SEALED AIR vs. Hisense Home Appliances
Performance |
| Timeline |
| SEALED AIR |
| Hisense Home Appliances |
SEALED AIR and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and Hisense Home
The main advantage of trading using opposite SEALED AIR and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR 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.| SEALED AIR vs. MeVis Medical Solutions | SEALED AIR vs. PULSION Medical Systems | SEALED AIR vs. Jacquet Metal Service | SEALED AIR vs. ONWARD MEDICAL BV |
| Hisense Home vs. Performance Food Group | Hisense Home vs. CEOTRONICS | Hisense Home vs. United Natural Foods | Hisense Home vs. SENECA FOODS A |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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