Correlation Between HEMISPHERE EGY and QINGCI GAMES

Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY and QINGCI GAMES 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 EGY and QINGCI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HEMISPHERE EGY and QINGCI GAMES INC, you can compare the effects of market volatilities on HEMISPHERE EGY and QINGCI GAMES 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 EGY with a short position of QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and QINGCI GAMES.

Diversification Opportunities for HEMISPHERE EGY and QINGCI GAMES

-0.22

Correlation Coefficient

HEMISPHERE EGY  QINGCI GAMES

Very good diversification

The 3 months correlation between HEMISPHERE and QINGCI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC and HEMISPHERE EGY 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 EGY are associated (or correlated) with QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and QINGCI GAMES go up and down completely randomly.

Pair Corralation between HEMISPHERE EGY and QINGCI GAMES

Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 90.95 times less return on investment than QINGCI GAMES. But when comparing it to its historical volatility, HEMISPHERE EGY is 4.25 times less risky than QINGCI GAMES. It trades about 0.01 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  27.00  in QINGCI GAMES INC on December 1, 2024 and sell it today you would earn a total of  8.00  from holding QINGCI GAMES INC or generate 29.63% return on investment over 90 days.

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

HEMISPHERE EGY  vs.  QINGCI GAMES INC

HEMISPHERE EGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEMISPHERE EGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, HEMISPHERE EGY is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

QINGCI GAMES INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, QINGCI GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEMISPHERE EGY and QINGCI GAMES

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

The idea behind HEMISPHERE EGY and QINGCI GAMES INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..