Correlation Between InBody CoLtd and Humedix

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Can any of the company-specific risk be diversified away by investing in both InBody CoLtd and Humedix 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 InBody CoLtd and Humedix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InBody CoLtd and Humedix Co, you can compare the effects of market volatilities on InBody CoLtd and Humedix 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 InBody CoLtd with a short position of Humedix. Check out your portfolio center. Please also check ongoing floating volatility patterns of InBody CoLtd and Humedix.

Diversification Opportunities for InBody CoLtd and Humedix

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between InBody and Humedix is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding InBody CoLtd and Humedix Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humedix and InBody CoLtd 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 InBody CoLtd are associated (or correlated) with Humedix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humedix has no effect on the direction of InBody CoLtd i.e., InBody CoLtd and Humedix go up and down completely randomly.

Pair Corralation between InBody CoLtd and Humedix

Assuming the 90 days trading horizon InBody CoLtd is expected to under-perform the Humedix. But the stock apears to be less risky and, when comparing its historical volatility, InBody CoLtd is 1.42 times less risky than Humedix. The stock trades about 0.0 of its potential returns per unit of risk. The Humedix Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,600,359  in Humedix Co on November 29, 2024 and sell it today you would earn a total of  1,294,641  from holding Humedix Co or generate 49.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.79%
ValuesDaily Returns

InBody CoLtd  vs.  Humedix Co

 Performance 
       Timeline  
InBody CoLtd 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in InBody CoLtd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, InBody CoLtd may actually be approaching a critical reversion point that can send shares even higher in March 2025.
Humedix 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Humedix Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Humedix sustained solid returns over the last few months and may actually be approaching a breakup point.

InBody CoLtd and Humedix Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with InBody CoLtd and Humedix

The main advantage of trading using opposite InBody CoLtd and Humedix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InBody CoLtd position performs unexpectedly, Humedix 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 Humedix will offset losses from the drop in Humedix's long position.
The idea behind InBody CoLtd and Humedix Co 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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