Correlation Between Ihuman and Albertsons Companies

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

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

Diversification Opportunities for Ihuman and Albertsons Companies

-0.41

Correlation Coefficient

Ihuman  Albertsons Companies

Very good diversification

The 3 months correlation between Ihuman and Albertsons is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and Ihuman 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 Ihuman Inc are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of Ihuman i.e., Ihuman and Albertsons Companies go up and down completely randomly.

Pair Corralation between Ihuman and Albertsons Companies

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 3.12 times more return on investment than Albertsons Companies. However, Ihuman is 3.12 times more volatile than Albertsons Companies. It trades about 0.02 of its potential returns per unit of risk. Albertsons Companies is currently generating about 0.04 per unit of risk. If you would invest  165.00  in Ihuman Inc on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Ihuman Inc or generate 0.0% return on investment over 90 days.

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

Ihuman Inc  vs.  Albertsons Companies

Ihuman Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Ihuman is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Albertsons Companies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Albertsons Companies is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ihuman and Albertsons Companies

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

The idea behind Ihuman Inc and Albertsons Companies 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.