Correlation Between Kuke Music and Ihuman

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

By analyzing existing cross correlation between Kuke Music Holding and Ihuman Inc, you can compare the effects of market volatilities on Kuke Music and Ihuman 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 Kuke Music with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Ihuman.

Diversification Opportunities for Kuke Music and Ihuman

-0.74

Correlation Coefficient

Kuke Music  Ihuman

Pay attention - limited upside

The 3 months correlation between Kuke and Ihuman is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Kuke Music 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 Kuke Music Holding are associated (or correlated) with Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Kuke Music i.e., Kuke Music and Ihuman go up and down completely randomly.

Pair Corralation between Kuke Music and Ihuman

Given the investment horizon of 90 days Kuke Music is expected to generate 1.89 times less return on investment than Ihuman. In addition to that, Kuke Music is 2.18 times more volatile than Ihuman Inc. It trades about 0.03 of its total potential returns per unit of risk. Ihuman Inc is currently generating about 0.13 per unit of volatility. 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

Kuke Music Holding  vs.  Ihuman Inc

Kuke Music Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kuke Music Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting forward-looking signals, Kuke Music exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Kuke Music and Ihuman

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

The idea behind Kuke Music Holding and Ihuman Inc 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 Stocks Directory module to find actively traded stocks across global markets.