Correlation Between Golden Sun and Ihuman

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

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

Diversification Opportunities for Golden Sun and Ihuman

0.16

Correlation Coefficient

Golden Sun  Ihuman

Average diversification

The 3 months correlation between Golden and Ihuman is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Golden Sun 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 Golden Sun Education 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 Golden Sun i.e., Golden Sun and Ihuman go up and down completely randomly.

Pair Corralation between Golden Sun and Ihuman

Given the investment horizon of 90 days Golden Sun is expected to generate 1.28 times less return on investment than Ihuman. But when comparing it to its historical volatility, Golden Sun Education is 1.01 times less risky than Ihuman. It trades about 0.1 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Ihuman Inc on December 28, 2024 and sell it today you would earn a total of  60.00  from holding Ihuman Inc or generate 36.36% return on investment over 90 days.

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

Golden Sun Education  vs.  Ihuman Inc

Golden Sun Education

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Sun Education are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Golden Sun displayed solid returns over the last few months and may actually be approaching a breakup point.

Ihuman Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Sun and Ihuman

The main advantage of trading using opposite Golden Sun and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Sun 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 Golden Sun Education 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.

Check out your portfolio center.

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.