Correlation Between Asia Plus and Humanica Public

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

Diversification Opportunities for Asia Plus and Humanica Public

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Asia and Humanica is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Humanica Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humanica Public and Asia Plus 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 Asia Plus Group are associated (or correlated) with Humanica Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humanica Public has no effect on the direction of Asia Plus i.e., Asia Plus and Humanica Public go up and down completely randomly.

Pair Corralation between Asia Plus and Humanica Public

Assuming the 90 days trading horizon Asia Plus Group is expected to under-perform the Humanica Public. But the stock apears to be less risky and, when comparing its historical volatility, Asia Plus Group is 2.02 times less risky than Humanica Public. The stock trades about -0.01 of its potential returns per unit of risk. The Humanica Public is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  964.00  in Humanica Public on August 31, 2024 and sell it today you would lose (59.00) from holding Humanica Public or give up 6.12% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.73%
ValuesDaily Returns

Asia Plus Group  vs.  Humanica Public

 Performance 
       Timeline  
Asia Plus Group 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Asia Plus Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Asia Plus may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Humanica Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Humanica Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Asia Plus and Humanica Public Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Asia Plus and Humanica Public

The main advantage of trading using opposite Asia Plus and Humanica Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, Humanica Public 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 Humanica Public will offset losses from the drop in Humanica Public's long position.
The idea behind Asia Plus Group and Humanica Public 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.
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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