Correlation Between Humasis Co and HLB Power

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

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

Diversification Opportunities for Humasis Co and HLB Power

0.45

Correlation Coefficient

Humasis Co  HLB Power

Very weak diversification

The 3 months correlation between Humasis and HLB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and HLB Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLB Power and Humasis Co 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 Humasis Co are associated (or correlated) with HLB Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLB Power has no effect on the direction of Humasis Co i.e., Humasis Co and HLB Power go up and down completely randomly.

Pair Corralation between Humasis Co and HLB Power

Assuming the 90 days trading horizon Humasis Co is expected to generate 0.25 times more return on investment than HLB Power. However, Humasis Co is 4.07 times less risky than HLB Power. It trades about -0.05 of its potential returns per unit of risk. HLB Power Co is currently generating about -0.41 per unit of risk. If you would invest  170,300  in Humasis Co on December 2, 2024 and sell it today you would lose (3,500) from holding Humasis Co or give up 2.06% of portfolio value over 90 days.

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

Humasis Co  vs.  HLB Power Co

Humasis Co

Risk-Adjusted Performance

Very Weak

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

HLB Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days HLB Power Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Humasis Co and HLB Power

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

The idea behind Humasis Co and HLB Power 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.