Correlation Between Hisense Home and Perdoceo Education

Can any of the company-specific risk be diversified away by investing in both Hisense Home and Perdoceo Education 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 Hisense Home and Perdoceo Education into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hisense Home Appliances and Perdoceo Education, you can compare the effects of market volatilities on Hisense Home and Perdoceo Education 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 Hisense Home with a short position of Perdoceo Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Perdoceo Education.

Diversification Opportunities for Hisense Home and Perdoceo Education

0.08

Correlation Coefficient

Hisense Home  Perdoceo Education

Significant diversification

The 3 months correlation between Hisense and Perdoceo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Perdoceo Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdoceo Education and Hisense Home 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 Hisense Home Appliances are associated (or correlated) with Perdoceo Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdoceo Education has no effect on the direction of Hisense Home i.e., Hisense Home and Perdoceo Education go up and down completely randomly.

Pair Corralation between Hisense Home and Perdoceo Education

Assuming the 90 days horizon Hisense Home Appliances is expected to under-perform the Perdoceo Education. In addition to that, Hisense Home is 1.02 times more volatile than Perdoceo Education. It trades about -0.32 of its total potential returns per unit of risk. Perdoceo Education is currently generating about 0.1 per unit of volatility. If you would invest  2,690  in Perdoceo Education on March 23, 2025 and sell it today you would earn a total of  90.00  from holding Perdoceo Education or generate 3.35% return on investment over 90 days.

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

Hisense Home Appliances  vs.  Perdoceo Education

Hisense Home Appliances

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hisense Home Appliances has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Perdoceo Education

Risk-Adjusted Performance

OK

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

Pair Trading with Hisense Home and Perdoceo Education

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

The idea behind Hisense Home Appliances and Perdoceo Education 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.