Correlation Between Ihuman and Evertz Technologies

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

By analyzing existing cross correlation between Ihuman Inc and Evertz Technologies Limited, you can compare the effects of market volatilities on Ihuman and Evertz Technologies 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 Evertz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Evertz Technologies.

Diversification Opportunities for Ihuman and Evertz Technologies

0.36

Correlation Coefficient

Ihuman  Evertz Technologies

Weak diversification

The 3 months correlation between Ihuman and Evertz is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies 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 Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of Ihuman i.e., Ihuman and Evertz Technologies go up and down completely randomly.

Pair Corralation between Ihuman and Evertz Technologies

Allowing for the 90-day total investment horizon Ihuman is expected to generate 2.05 times less return on investment than Evertz Technologies. In addition to that, Ihuman is 1.08 times more volatile than Evertz Technologies Limited. It trades about 0.01 of its total potential returns per unit of risk. Evertz Technologies Limited is currently generating about 0.01 per unit of volatility. If you would invest  936.00  in Evertz Technologies Limited on September 19, 2024 and sell it today you would lose (62.00) from holding Evertz Technologies Limited or give up 6.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	71.98%
Values	Daily Returns

Ihuman Inc  vs.  Evertz Technologies Limited

Ihuman Inc

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Evertz Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evertz Technologies Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Evertz Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ihuman and Evertz Technologies

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

The idea behind Ihuman Inc and Evertz Technologies Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.