Correlation Between Humanica Public and AP Public

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Can any of the company-specific risk be diversified away by investing in both Humanica Public and AP Public 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 Humanica Public and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humanica Public and AP Public, you can compare the effects of market volatilities on Humanica Public and AP Public 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 Humanica Public with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humanica Public and AP Public.

Diversification Opportunities for Humanica Public and AP Public

HumanicaAP PublicDiversified AwayHumanicaAP PublicDiversified Away100%
0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Humanica and AP Public is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Humanica Public and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Humanica Public 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 Humanica Public are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Humanica Public i.e., Humanica Public and AP Public go up and down completely randomly.

Pair Corralation between Humanica Public and AP Public

Assuming the 90 days trading horizon Humanica Public is expected to under-perform the AP Public. But the stock apears to be less risky and, when comparing its historical volatility, Humanica Public is 1.12 times less risky than AP Public. The stock trades about -0.2 of its potential returns per unit of risk. The AP Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  845.00  in AP Public on November 26, 2024 and sell it today you would earn a total of  0.00  from holding AP Public or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Humanica Public  vs.  AP Public

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-100
JavaScript chart by amCharts 3.21.15HUMAN AP
       Timeline  
Humanica Public 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Humanica Public 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 fundamental drivers remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.588.599.5
AP Public 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days AP Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, AP Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.67.888.28.48.68.899.2

Humanica Public and AP Public Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.56-2.66-1.77-0.880.010.681.372.052.74 0.060.070.080.090.10
JavaScript chart by amCharts 3.21.15HUMAN AP
       Returns  

Pair Trading with Humanica Public and AP Public

The main advantage of trading using opposite Humanica Public and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humanica Public position performs unexpectedly, AP Public 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 AP Public will offset losses from the drop in AP Public's long position.
The idea behind Humanica Public and AP Public 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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