Correlation Between Coda Octopus and Ihuman

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

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

Diversification Opportunities for Coda Octopus and Ihuman

-0.34

Correlation Coefficient

Coda Octopus  Ihuman

Very good diversification

The 3 months correlation between Coda and Ihuman is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Coda Octopus 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 Coda Octopus Group 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 Coda Octopus i.e., Coda Octopus and Ihuman go up and down completely randomly.

Pair Corralation between Coda Octopus and Ihuman

Given the investment horizon of 90 days Coda Octopus Group is expected to generate 0.72 times more return on investment than Ihuman. However, Coda Octopus Group is 1.38 times less risky than Ihuman. It trades about 0.1 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.01 per unit of risk. If you would invest  611.00  in Coda Octopus Group on September 19, 2024 and sell it today you would earn a total of  191.00  from holding Coda Octopus Group or generate 31.26% return on investment over 90 days.

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

Coda Octopus Group  vs.  Ihuman Inc

Coda Octopus Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Coda Octopus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ihuman Inc

Risk-Adjusted Performance

4 of 100

Modest

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 Coda Octopus and Ihuman

The main advantage of trading using opposite Coda Octopus and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus 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 Coda Octopus Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.