Correlation Between YHN Acquisition and Ihuman

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

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

Diversification Opportunities for YHN Acquisition and Ihuman

-0.1

Correlation Coefficient

YHN Acquisition  Ihuman

Good diversification

The 3 months correlation between YHN and Ihuman is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and YHN Acquisition 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 YHN Acquisition I 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 YHN Acquisition i.e., YHN Acquisition and Ihuman go up and down completely randomly.

Pair Corralation between YHN Acquisition and Ihuman

Assuming the 90 days horizon YHN Acquisition I is expected to generate 3.31 times more return on investment than Ihuman. However, YHN Acquisition is 3.31 times more volatile than Ihuman Inc. It trades about 0.15 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.15 per unit of risk. If you would invest  13.00  in YHN Acquisition I on December 26, 2024 and sell it today you would earn a total of  9.00  from holding YHN Acquisition I or generate 69.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.33%
Values	Daily Returns

YHN Acquisition I  vs.  Ihuman Inc

YHN Acquisition I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, YHN Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Ihuman Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YHN Acquisition and Ihuman

The main advantage of trading using opposite YHN Acquisition and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YHN Acquisition 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 YHN Acquisition I 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.