Correlation Between Humasis and People Technology
Can any of the company-specific risk be diversified away by investing in both Humasis and People Technology 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 People Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humasis Co and People Technology, you can compare the effects of market volatilities on Humasis and People Technology 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humasis and People Technology.
Diversification Opportunities for Humasis and People Technology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Humasis and People is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Humasis i.e., Humasis and People Technology go up and down completely randomly.
Pair Corralation between Humasis and People Technology
Assuming the 90 days trading horizon Humasis Co is expected to generate 2.5 times more return on investment than People Technology. However, Humasis is 2.5 times more volatile than People Technology. It trades about 0.14 of its potential returns per unit of risk. People Technology is currently generating about -0.13 per unit of risk. If you would invest 151,500 in Humasis Co on August 29, 2024 and sell it today you would earn a total of 34,900 from holding Humasis Co or generate 23.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humasis Co vs. People Technology
Performance |
| Timeline |
| Humasis |
| People Technology |
Humasis and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humasis and People Technology
The main advantage of trading using opposite Humasis and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humasis position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.The idea behind Humasis Co and People Technology 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.| People Technology vs. Samsung Electronics Co | People Technology vs. Samsung Electronics Co | People Technology vs. Hyundai Motor Co | People Technology vs. Hyundai Motor |
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 Stocks Directory module to find actively traded stocks across global markets.
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