Correlation Between BOVIS HOMES and Hisense Home

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

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

Diversification Opportunities for BOVIS HOMES and Hisense Home

-0.05

Correlation Coefficient

BOVIS HOMES  Hisense Home

Good diversification

The 3 months correlation between BOVIS and Hisense is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BOVIS HOMES GROUP and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances and BOVIS HOMES 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 BOVIS HOMES GROUP are associated (or correlated) with Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of BOVIS HOMES i.e., BOVIS HOMES and Hisense Home go up and down completely randomly.

Pair Corralation between BOVIS HOMES and Hisense Home

Assuming the 90 days trading horizon BOVIS HOMES GROUP is expected to under-perform the Hisense Home. In addition to that, BOVIS HOMES is 1.17 times more volatile than Hisense Home Appliances. It trades about -0.07 of its total potential returns per unit of risk. Hisense Home Appliances is currently generating about -0.02 per unit of volatility. If you would invest  252.00  in Hisense Home Appliances on May 7, 2025 and sell it today you would lose (9.00) from holding Hisense Home Appliances or give up 3.57% of portfolio value over 90 days.

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

BOVIS HOMES GROUP  vs.  Hisense Home Appliances

BOVIS HOMES GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days BOVIS HOMES GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 nearly stable basic indicators, Hisense Home is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BOVIS HOMES and Hisense Home

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

The idea behind BOVIS HOMES GROUP and Hisense Home Appliances 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.