Correlation Between Hemisphere Energy and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Luckin Coffee 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 Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy Corp and Luckin Coffee, you can compare the effects of market volatilities on Hemisphere Energy and Luckin Coffee 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 Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Luckin Coffee.
Diversification Opportunities for Hemisphere Energy and Luckin Coffee
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hemisphere and Luckin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy Corp and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee 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 Corp are associated (or correlated) with Luckin Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luckin Coffee has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Luckin Coffee go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Luckin Coffee
Assuming the 90 days trading horizon Hemisphere Energy Corp is expected to generate 0.42 times more return on investment than Luckin Coffee. However, Hemisphere Energy Corp is 2.4 times less risky than Luckin Coffee. It trades about 0.1 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.0 per unit of risk. If you would invest 73.00 in Hemisphere Energy Corp on October 6, 2024 and sell it today you would earn a total of 48.00 from holding Hemisphere Energy Corp or generate 65.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hemisphere Energy Corp vs. Luckin Coffee
Performance |
Timeline |
Hemisphere Energy Corp |
Luckin Coffee |
Hemisphere Energy and Luckin Coffee Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hemisphere Energy and Luckin Coffee
The main advantage of trading using opposite Hemisphere Energy and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Luckin Coffee 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 Luckin Coffee will offset losses from the drop in Luckin Coffee's long position.Hemisphere Energy vs. PNC Financial Services | Hemisphere Energy vs. SUN LIFE FINANCIAL | Hemisphere Energy vs. REVO INSURANCE SPA | Hemisphere Energy vs. Commercial Vehicle Group |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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