Correlation Between N Citron and Humasis

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

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

Diversification Opportunities for N Citron and Humasis

-0.43

Correlation Coefficient

N Citron  Humasis

Very good diversification

The 3 months correlation between 101400 and Humasis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding N Citron and Humasis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humasis and N Citron 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 N Citron are associated (or correlated) with Humasis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humasis has no effect on the direction of N Citron i.e., N Citron and Humasis go up and down completely randomly.

Pair Corralation between N Citron and Humasis

Assuming the 90 days trading horizon N Citron is expected to under-perform the Humasis. But the stock apears to be less risky and, when comparing its historical volatility, N Citron is 3.68 times less risky than Humasis. The stock trades about -0.05 of its potential returns per unit of risk. The Humasis Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  152,100  in Humasis Co on October 22, 2024 and sell it today you would earn a total of  29,100  from holding Humasis Co or generate 19.13% return on investment over 90 days.

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

N Citron  vs.  Humasis Co

N Citron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days N Citron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, N Citron is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Humasis

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Humasis Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Humasis sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with N Citron and Humasis

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

The idea behind N Citron and Humasis Co 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.