Correlation Between Ihuman and Village Super

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

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

Diversification Opportunities for Ihuman and Village Super

0.35

Correlation Coefficient

Ihuman  Village Super

Weak diversification

The 3 months correlation between Ihuman and Village is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Village Super Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Super Market 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 Village Super. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Super Market has no effect on the direction of Ihuman i.e., Ihuman and Village Super go up and down completely randomly.

Pair Corralation between Ihuman and Village Super

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 2.65 times more return on investment than Village Super. However, Ihuman is 2.65 times more volatile than Village Super Market. It trades about 0.14 of its potential returns per unit of risk. Village Super Market is currently generating about 0.15 per unit of risk. If you would invest  165.00  in Ihuman Inc on December 28, 2024 and sell it today you would earn a total of  68.00  from holding Ihuman Inc or generate 41.21% return on investment over 90 days.

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

Ihuman Inc  vs.  Village Super Market

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.

Village Super Market

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Village Super Market are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Village Super sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ihuman and Village Super

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

The idea behind Ihuman Inc and Village Super Market 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.