Correlation Between 62886HAP6 and Ihuman

Can any of the company-specific risk be diversified away by investing in both 62886HAP6 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 62886HAP6 and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NCL 3625 and Ihuman Inc, you can compare the effects of market volatilities on 62886HAP6 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 62886HAP6 with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of 62886HAP6 and Ihuman.

Diversification Opportunities for 62886HAP6 and Ihuman

-0.13

Correlation Coefficient

62886HAP6  Ihuman

Good diversification

The 3 months correlation between 62886HAP6 and Ihuman is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NCL 3625 and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and 62886HAP6 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 NCL 3625 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 62886HAP6 i.e., 62886HAP6 and Ihuman go up and down completely randomly.

Pair Corralation between 62886HAP6 and Ihuman

Assuming the 90 days trading horizon NCL 3625 is expected to generate 0.51 times more return on investment than Ihuman. However, NCL 3625 is 1.98 times less risky than Ihuman. It trades about -0.02 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.11 per unit of risk. If you would invest  9,953  in NCL 3625 on October 14, 2024 and sell it today you would lose (102.00) from holding NCL 3625 or give up 1.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	41.94%
Values	Daily Returns

NCL 3625  vs.  Ihuman Inc

62886HAP6

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NCL 3625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 62886HAP6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ihuman Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ihuman Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with 62886HAP6 and Ihuman

The main advantage of trading using opposite 62886HAP6 and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 62886HAP6 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 NCL 3625 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 Transaction History module to view history of all your transactions and understand their impact on performance.