Correlation Between Humacyte and Simulations Plus

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

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

Diversification Opportunities for Humacyte and Simulations Plus

0.01

Correlation Coefficient

Humacyte  Simulations Plus

Significant diversification

The 3 months correlation between Humacyte and Simulations is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Humacyte and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus and Humacyte 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 Humacyte are associated (or correlated) with Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of Humacyte i.e., Humacyte and Simulations Plus go up and down completely randomly.

Pair Corralation between Humacyte and Simulations Plus

Assuming the 90 days horizon Humacyte is expected to generate 5.2 times more return on investment than Simulations Plus. However, Humacyte is 5.2 times more volatile than Simulations Plus. It trades about 0.16 of its potential returns per unit of risk. Simulations Plus is currently generating about -0.21 per unit of risk. If you would invest  171.00  in Humacyte on September 29, 2024 and sell it today you would earn a total of  50.00  from holding Humacyte or generate 29.24% return on investment over 90 days.

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

Humacyte  vs.  Simulations Plus

Humacyte

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Humacyte are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Humacyte showed solid returns over the last few months and may actually be approaching a breakup point.

Simulations Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simulations Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Humacyte and Simulations Plus

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

The idea behind Humacyte and Simulations Plus 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.