Correlation Between Ihuman and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Ihuman and AKITA Drilling 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 Ihuman and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and AKITA Drilling, you can compare the effects of market volatilities on Ihuman and AKITA Drilling 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 Ihuman with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and AKITA Drilling.
Diversification Opportunities for Ihuman and AKITA Drilling
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ihuman and AKITA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Ihuman 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 Ihuman Inc are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Ihuman i.e., Ihuman and AKITA Drilling go up and down completely randomly.
Pair Corralation between Ihuman and AKITA Drilling
Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the AKITA Drilling. In addition to that, Ihuman is 1.34 times more volatile than AKITA Drilling. It trades about -0.03 of its total potential returns per unit of risk. AKITA Drilling is currently generating about 0.03 per unit of volatility. If you would invest 101.00 in AKITA Drilling on September 14, 2024 and sell it today you would earn a total of 15.00 from holding AKITA Drilling or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. AKITA Drilling
Performance |
| Timeline |
| Ihuman Inc |
| AKITA Drilling |
Ihuman and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and AKITA Drilling
The main advantage of trading using opposite Ihuman and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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