Correlation Between Information Services and Hemisphere Energy

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

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

Diversification Opportunities for Information Services and Hemisphere Energy

0.71

Correlation Coefficient

Information Services  Hemisphere Energy

Poor diversification

The 3 months correlation between Information and Hemisphere is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Information Services and Hemisphere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy and Information Services 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 Information Services are associated (or correlated) with Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy has no effect on the direction of Information Services i.e., Information Services and Hemisphere Energy go up and down completely randomly.

Pair Corralation between Information Services and Hemisphere Energy

Assuming the 90 days trading horizon Information Services is expected to generate 0.99 times more return on investment than Hemisphere Energy. However, Information Services is 1.01 times less risky than Hemisphere Energy. It trades about 0.29 of its potential returns per unit of risk. Hemisphere Energy is currently generating about 0.11 per unit of risk. If you would invest  2,680  in Information Services on March 30, 2025 and sell it today you would earn a total of  565.00  from holding Information Services or generate 21.08% return on investment over 90 days.

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

Information Services  vs.  Hemisphere Energy

Information Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Information Services displayed solid returns over the last few months and may actually be approaching a breakup point.

Hemisphere Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hemisphere Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hemisphere Energy may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Information Services and Hemisphere Energy

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

The idea behind Information Services and Hemisphere Energy 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.