Correlation Between Direct Capital and Human Xtensions
Can any of the company-specific risk be diversified away by investing in both Direct Capital and Human Xtensions 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 Direct Capital and Human Xtensions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Capital Investments and Human Xtensions, you can compare the effects of market volatilities on Direct Capital and Human Xtensions 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 Direct Capital with a short position of Human Xtensions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Capital and Human Xtensions.
Diversification Opportunities for Direct Capital and Human Xtensions
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Direct and Human is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Direct Capital Investments and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions and Direct Capital 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 Direct Capital Investments are associated (or correlated) with Human Xtensions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Human Xtensions has no effect on the direction of Direct Capital i.e., Direct Capital and Human Xtensions go up and down completely randomly.
Pair Corralation between Direct Capital and Human Xtensions
Assuming the 90 days trading horizon Direct Capital Investments is expected to under-perform the Human Xtensions. In addition to that, Direct Capital is 1.94 times more volatile than Human Xtensions. It trades about -0.2 of its total potential returns per unit of risk. Human Xtensions is currently generating about -0.15 per unit of volatility. If you would invest 3,820 in Human Xtensions on August 29, 2024 and sell it today you would lose (720.00) from holding Human Xtensions or give up 18.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Direct Capital Investments vs. Human Xtensions
Performance |
| Timeline |
| Direct Capital Inves |
| Human Xtensions |
Direct Capital and Human Xtensions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Capital and Human Xtensions
The main advantage of trading using opposite Direct Capital and Human Xtensions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Capital position performs unexpectedly, Human Xtensions 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 Human Xtensions will offset losses from the drop in Human Xtensions' long position.| Direct Capital vs. Nice | Direct Capital vs. The Gold Bond | Direct Capital vs. Bank Leumi Le Israel | Direct Capital vs. ICL Israel Chemicals |
| Human Xtensions vs. ICL Israel Chemicals | Human Xtensions vs. MEITAV INVESTMENTS HOUSE | Human Xtensions vs. Harel Insurance Investments | Human Xtensions vs. Amot Investments |
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 CEOs Directory module to screen CEOs from public companies around the world.
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