Correlation Between Ihuman and China Liberal
Can any of the company-specific risk be diversified away by investing in both Ihuman and China Liberal 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 China Liberal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and China Liberal Education, you can compare the effects of market volatilities on Ihuman and China Liberal 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 China Liberal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and China Liberal.
Diversification Opportunities for Ihuman and China Liberal
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ihuman and China is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and China Liberal Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Liberal Education 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 China Liberal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Liberal Education has no effect on the direction of Ihuman i.e., Ihuman and China Liberal go up and down completely randomly.
Pair Corralation between Ihuman and China Liberal
Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 0.8 times more return on investment than China Liberal. However, Ihuman Inc is 1.24 times less risky than China Liberal. It trades about 0.02 of its potential returns per unit of risk. China Liberal Education is currently generating about -0.05 per unit of risk. If you would invest 165.00 in Ihuman Inc on August 31, 2024 and sell it today you would lose (1.00) from holding Ihuman Inc or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. China Liberal Education
Performance |
| Timeline |
| Ihuman Inc |
| China Liberal Education |
Ihuman and China Liberal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and China Liberal
The main advantage of trading using opposite Ihuman and China Liberal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, China Liberal 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 China Liberal will offset losses from the drop in China Liberal's long position.| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
| China Liberal vs. Lixiang Education Holding | China Liberal vs. Four Seasons Education | China Liberal vs. Jianzhi Education Technology | China Liberal vs. Elite Education Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |