Correlation Between Ihuman and Maison Solutions

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

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

Diversification Opportunities for Ihuman and Maison Solutions

0.07

Correlation Coefficient

Ihuman  Maison Solutions

Significant diversification

The 3 months correlation between Ihuman and Maison is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Maison Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maison Solutions 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 Maison Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maison Solutions has no effect on the direction of Ihuman i.e., Ihuman and Maison Solutions go up and down completely randomly.

Pair Corralation between Ihuman and Maison Solutions

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 0.74 times more return on investment than Maison Solutions. However, Ihuman Inc is 1.35 times less risky than Maison Solutions. It trades about 0.13 of its potential returns per unit of risk. Maison Solutions is currently generating about 0.01 per unit of risk. If you would invest  172.00  in Ihuman Inc on December 27, 2024 and sell it today you would earn a total of  67.00  from holding Ihuman Inc or generate 38.95% return on investment over 90 days.

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

Ihuman Inc  vs.  Maison Solutions

Ihuman Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Maison Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maison Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Maison Solutions is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ihuman and Maison Solutions

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

The idea behind Ihuman Inc and Maison Solutions 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 Valuation module to check real value of public entities based on technical and fundamental data.