Correlation Between Ihuman and American Public

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

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

Diversification Opportunities for Ihuman and American Public

-0.57

Correlation Coefficient

Ihuman  American Public

Excellent diversification

The 3 months correlation between Ihuman and American is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education 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 American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of Ihuman i.e., Ihuman and American Public go up and down completely randomly.

Pair Corralation between Ihuman and American Public

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 0.92 times more return on investment than American Public. However, Ihuman Inc is 1.09 times less risky than American Public. It trades about 0.28 of its potential returns per unit of risk. American Public Education is currently generating about 0.12 per unit of risk. If you would invest  152.00  in Ihuman Inc on September 23, 2024 and sell it today you would earn a total of  20.00  from holding Ihuman Inc or generate 13.16% 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.  American Public Education

Ihuman Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman may actually be approaching a critical reversion point that can send shares even higher in January 2025.

American Public Education

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Public Education are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical and fundamental indicators, American Public demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ihuman and American Public

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

The idea behind Ihuman Inc and American Public Education 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.