Correlation Between Ihuman and NWTN

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

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

Diversification Opportunities for Ihuman and NWTN

-0.65

Correlation Coefficient

Ihuman  NWTN

Excellent diversification

The 3 months correlation between Ihuman and NWTN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and NWTN Class B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NWTN Class B 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 NWTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NWTN Class B has no effect on the direction of Ihuman i.e., Ihuman and NWTN go up and down completely randomly.

Pair Corralation between Ihuman and NWTN

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 0.61 times more return on investment than NWTN. However, Ihuman Inc is 1.63 times less risky than NWTN. It trades about 0.13 of its potential returns per unit of risk. NWTN Class B is currently generating about -0.13 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ihuman Inc  vs.  NWTN Class B

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.

NWTN Class B

Risk-Adjusted Performance

Very Weak

Over the last 90 days NWTN Class B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ihuman and NWTN

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

The idea behind Ihuman Inc and NWTN Class B 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.