Correlation Between Four Seasons and Ihuman
Can any of the company-specific risk be diversified away by investing in both Four Seasons 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 Four Seasons and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Seasons Education and Ihuman Inc, you can compare the effects of market volatilities on Four Seasons 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 Four Seasons with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Seasons and Ihuman.
Diversification Opportunities for Four Seasons and Ihuman
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Four and Ihuman is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Four Seasons Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Four Seasons 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 Four Seasons 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 Four Seasons i.e., Four Seasons and Ihuman go up and down completely randomly.
Pair Corralation between Four Seasons and Ihuman
Given the investment horizon of 90 days Four Seasons Education is expected to generate 13.1 times more return on investment than Ihuman. However, Four Seasons is 13.1 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 -0.03 per unit of risk. If you would invest 663.00 in Four Seasons Education on August 31, 2024 and sell it today you would earn a total of 389.00 from holding Four Seasons Education or generate 58.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.39% |
| Values | Daily Returns |
Four Seasons Education vs. Ihuman Inc
Performance |
| Timeline |
| Four Seasons Education |
| Ihuman Inc |
Four Seasons and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Seasons and Ihuman
The main advantage of trading using opposite Four Seasons and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Seasons 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.| Four Seasons vs. Wah Fu Education | Four Seasons vs. Sunlands Technology Group | Four Seasons vs. 51Talk Online Education | Four Seasons vs. China Liberal Education |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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