Correlation Between Ihuman and Torex Gold

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

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

Diversification Opportunities for Ihuman and Torex Gold

0.16

Correlation Coefficient

Ihuman  Torex Gold

Average diversification

The 3 months correlation between Ihuman and Torex is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources 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 Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Ihuman i.e., Ihuman and Torex Gold go up and down completely randomly.

Pair Corralation between Ihuman and Torex Gold

Allowing for the 90-day total investment horizon Ihuman is expected to generate 3.01 times less return on investment than Torex Gold. In addition to that, Ihuman is 1.41 times more volatile than Torex Gold Resources. It trades about 0.02 of its total potential returns per unit of risk. Torex Gold Resources is currently generating about 0.08 per unit of volatility. If you would invest  1,852  in Torex Gold Resources on September 2, 2024 and sell it today you would earn a total of  249.00  from holding Torex Gold Resources or generate 13.44% 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.  Torex Gold Resources

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.

Torex Gold Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Torex Gold Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Torex Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ihuman and Torex Gold

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

The idea behind Ihuman Inc and Torex Gold Resources 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.