Correlation Between Ihuman and 43284MAA6

Can any of the company-specific risk be diversified away by investing in both Ihuman and 43284MAA6 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 43284MAA6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ihuman Inc and US43284MAA62, you can compare the effects of market volatilities on Ihuman and 43284MAA6 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 43284MAA6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and 43284MAA6.

Diversification Opportunities for Ihuman and 43284MAA6

0.48

Correlation Coefficient

Ihuman  43284MAA6

Very weak diversification

The 3 months correlation between Ihuman and 43284MAA6 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and US43284MAA62 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US43284MAA62 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 43284MAA6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US43284MAA62 has no effect on the direction of Ihuman i.e., Ihuman and 43284MAA6 go up and down completely randomly.

Pair Corralation between Ihuman and 43284MAA6

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 9.61 times more return on investment than 43284MAA6. However, Ihuman is 9.61 times more volatile than US43284MAA62. It trades about 0.1 of its potential returns per unit of risk. US43284MAA62 is currently generating about 0.01 per unit of risk. If you would invest  165.00  in Ihuman Inc on November 28, 2024 and sell it today you would earn a total of  22.00  from holding Ihuman Inc or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.1%
Values	Daily Returns

Ihuman Inc  vs.  US43284MAA62

Ihuman Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 7 (%) 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.

US43284MAA62

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in US43284MAA62 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 43284MAA6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ihuman and 43284MAA6

The main advantage of trading using opposite Ihuman and 43284MAA6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, 43284MAA6 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 43284MAA6 will offset losses from the drop in 43284MAA6's long position.

The idea behind Ihuman Inc and US43284MAA62 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.