Correlation Between Allegiant Travel and Ihuman

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

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

Diversification Opportunities for Allegiant Travel and Ihuman

-0.46

Correlation Coefficient

Allegiant Travel  Ihuman

Very good diversification

The 3 months correlation between Allegiant and Ihuman is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Allegiant Travel 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 Allegiant Travel are associated (or correlated) with Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Allegiant Travel i.e., Allegiant Travel and Ihuman go up and down completely randomly.

Pair Corralation between Allegiant Travel and Ihuman

Given the investment horizon of 90 days Allegiant Travel is expected to generate 2.43 times less return on investment than Ihuman. In addition to that, Allegiant Travel is 1.16 times more volatile than Ihuman Inc. It trades about 0.09 of its total potential returns per unit of risk. Ihuman Inc is currently generating about 0.24 per unit of volatility. If you would invest  155.00  in Ihuman Inc on September 25, 2024 and sell it today you would earn a total of  17.00  from holding Ihuman Inc or generate 10.97% return on investment over 90 days.

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

Allegiant Travel  vs.  Ihuman Inc

Allegiant Travel

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allegiant Travel are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Allegiant Travel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ihuman Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allegiant Travel and Ihuman

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

The idea behind Allegiant Travel and Ihuman Inc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.