Correlation Between Humasis and Imarketkorea
Can any of the company-specific risk be diversified away by investing in both Humasis and Imarketkorea 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 Humasis and Imarketkorea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humasis Co and Imarketkorea, you can compare the effects of market volatilities on Humasis and Imarketkorea 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 Humasis with a short position of Imarketkorea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humasis and Imarketkorea.
Diversification Opportunities for Humasis and Imarketkorea
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Humasis and Imarketkorea is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and Imarketkorea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imarketkorea and Humasis 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 Humasis Co are associated (or correlated) with Imarketkorea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imarketkorea has no effect on the direction of Humasis i.e., Humasis and Imarketkorea go up and down completely randomly.
Pair Corralation between Humasis and Imarketkorea
Assuming the 90 days trading horizon Humasis Co is expected to generate 17.93 times more return on investment than Imarketkorea. However, Humasis is 17.93 times more volatile than Imarketkorea. It trades about 0.13 of its potential returns per unit of risk. Imarketkorea is currently generating about -0.18 per unit of risk. If you would invest 151,500 in Humasis Co on August 27, 2024 and sell it today you would earn a total of 29,500 from holding Humasis Co or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humasis Co vs. Imarketkorea
Performance |
| Timeline |
| Humasis |
| Imarketkorea |
Humasis and Imarketkorea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humasis and Imarketkorea
The main advantage of trading using opposite Humasis and Imarketkorea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humasis position performs unexpectedly, Imarketkorea 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 Imarketkorea will offset losses from the drop in Imarketkorea's long position.The idea behind Humasis Co and Imarketkorea 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.| Imarketkorea vs. FOODWELL Co | Imarketkorea vs. Ni Steel | Imarketkorea vs. FoodNamoo | Imarketkorea vs. Organic Special Pet |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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