Correlation Between IQ Candriam and Humankind Benefit

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

By analyzing existing cross correlation between IQ Candriam ESG and Humankind Benefit, you can compare the effects of market volatilities on IQ Candriam and Humankind Benefit 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 IQ Candriam with a short position of Humankind Benefit. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Candriam and Humankind Benefit.

Diversification Opportunities for IQ Candriam and Humankind Benefit

0.47

Correlation Coefficient

IQ Candriam  Humankind Benefit

Very weak diversification

The 3 months correlation between IQSU and Humankind is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding IQ Candriam ESG and Humankind Benefit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humankind Benefit and IQ Candriam 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 IQ Candriam ESG are associated (or correlated) with Humankind Benefit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humankind Benefit has no effect on the direction of IQ Candriam i.e., IQ Candriam and Humankind Benefit go up and down completely randomly.

Pair Corralation between IQ Candriam and Humankind Benefit

Given the investment horizon of 90 days IQ Candriam ESG is expected to generate 1.22 times more return on investment than Humankind Benefit. However, IQ Candriam is 1.22 times more volatile than Humankind Benefit. It trades about 0.09 of its potential returns per unit of risk. Humankind Benefit is currently generating about 0.06 per unit of risk. If you would invest  3,470  in IQ Candriam ESG on October 24, 2024 and sell it today you would earn a total of  1,483  from holding IQ Candriam ESG or generate 42.75% return on investment over 90 days.

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

IQ Candriam ESG  vs.  Humankind Benefit

IQ Candriam ESG

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IQ Candriam ESG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IQ Candriam is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Humankind Benefit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Humankind Benefit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Humankind Benefit is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IQ Candriam and Humankind Benefit

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

The idea behind IQ Candriam ESG and Humankind Benefit 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.