Correlation Between American Public and Ihuman
Can any of the company-specific risk be diversified away by investing in both American Public 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 American Public and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and Ihuman Inc, you can compare the effects of market volatilities on American Public 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 American Public with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Ihuman.
Diversification Opportunities for American Public and Ihuman
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Ihuman is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and American Public 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 American Public 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 American Public i.e., American Public and Ihuman go up and down completely randomly.
Pair Corralation between American Public and Ihuman
Given the investment horizon of 90 days American Public Education is expected to generate 1.15 times more return on investment than Ihuman. However, American Public is 1.15 times more volatile than Ihuman Inc. It trades about 0.05 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.02 per unit of risk. If you would invest 1,757 in American Public Education on September 3, 2024 and sell it today you would earn a total of 322.00 from holding American Public Education or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. Ihuman Inc
Performance |
| Timeline |
| American Public Education |
| Ihuman Inc |
American Public and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and Ihuman
The main advantage of trading using opposite American Public and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public 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.| American Public vs. Laureate Education | American Public vs. Afya | American Public vs. Strategic Education | American Public vs. Stride Inc |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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