Correlation Between Zhangmen Education and Ihuman

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

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

Diversification Opportunities for Zhangmen Education and Ihuman

0.04

Correlation Coefficient

Zhangmen Education  Ihuman

Significant diversification

The 3 months correlation between Zhangmen and Ihuman is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Zhangmen Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Zhangmen Education 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 Zhangmen Education 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 Zhangmen Education i.e., Zhangmen Education and Ihuman go up and down completely randomly.

Pair Corralation between Zhangmen Education and Ihuman

If you would invest  163.00  in Ihuman Inc on September 19, 2024 and sell it today you would earn a total of  14.00  from holding Ihuman Inc or generate 8.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Zhangmen Education  vs.  Ihuman Inc

Zhangmen Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhangmen Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Zhangmen Education is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ihuman Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhangmen Education and Ihuman

The main advantage of trading using opposite Zhangmen Education and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhangmen Education 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 Zhangmen Education 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.