Correlation Between China Liberal and Ihuman
Can any of the company-specific risk be diversified away by investing in both China Liberal 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 China Liberal and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Liberal Education and Ihuman Inc, you can compare the effects of market volatilities on China Liberal 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 China Liberal with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Liberal and Ihuman.
Diversification Opportunities for China Liberal and Ihuman
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Ihuman is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Liberal Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and China Liberal 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 China Liberal 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 China Liberal i.e., China Liberal and Ihuman go up and down completely randomly.
Pair Corralation between China Liberal and Ihuman
Given the investment horizon of 90 days China Liberal Education is expected to under-perform the Ihuman. In addition to that, China Liberal is 2.47 times more volatile than Ihuman Inc. It trades about -0.03 of its total potential returns per unit of risk. Ihuman Inc is currently generating about -0.03 per unit of volatility. If you would invest 376.00 in Ihuman Inc on August 31, 2024 and sell it today you would lose (212.00) from holding Ihuman Inc or give up 56.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Liberal Education vs. Ihuman Inc
Performance |
| Timeline |
| China Liberal Education |
| Ihuman Inc |
China Liberal and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Liberal and Ihuman
The main advantage of trading using opposite China Liberal and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Liberal 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.| China Liberal vs. Lixiang Education Holding | China Liberal vs. Four Seasons Education | China Liberal vs. Jianzhi Education Technology | China Liberal vs. Elite Education Group |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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