Correlation Between Hemisphere Energy and Pembina Pipeline

Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Pembina Pipeline 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 Hemisphere Energy and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hemisphere Energy and Pembina Pipeline Corp, you can compare the effects of market volatilities on Hemisphere Energy and Pembina Pipeline 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 Hemisphere Energy with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Pembina Pipeline.

Diversification Opportunities for Hemisphere Energy and Pembina Pipeline

0.03

Correlation Coefficient

Hemisphere Energy  Pembina Pipeline

Significant diversification

The 3 months correlation between Hemisphere and Pembina is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp and Hemisphere Energy 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 Hemisphere Energy are associated (or correlated) with Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Pembina Pipeline go up and down completely randomly.

Pair Corralation between Hemisphere Energy and Pembina Pipeline

Assuming the 90 days horizon Hemisphere Energy is expected to generate 1.72 times more return on investment than Pembina Pipeline. However, Hemisphere Energy is 1.72 times more volatile than Pembina Pipeline Corp. It trades about 0.05 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.26 per unit of risk. If you would invest  182.00  in Hemisphere Energy on October 10, 2024 and sell it today you would earn a total of  2.00  from holding Hemisphere Energy or generate 1.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hemisphere Energy  vs.  Pembina Pipeline Corp

Hemisphere Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hemisphere Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hemisphere Energy is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pembina Pipeline Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembina Pipeline Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Hemisphere Energy and Pembina Pipeline

The main advantage of trading using opposite Hemisphere Energy and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.

The idea behind Hemisphere Energy and Pembina Pipeline Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..