Correlation Between Ihuman and Flex
Can any of the company-specific risk be diversified away by investing in both Ihuman and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Flex, you can compare the effects of market volatilities on Ihuman and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Flex.
Diversification Opportunities for Ihuman and Flex
Modest diversification
The 3 months correlation between Ihuman and Flex is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Ihuman i.e., Ihuman and Flex go up and down completely randomly.
Pair Corralation between Ihuman and Flex
Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the Flex. But the stock apears to be less risky and, when comparing its historical volatility, Ihuman Inc is 1.32 times less risky than Flex. The stock trades about -0.39 of its potential returns per unit of risk. The Flex is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,426 in Flex on August 23, 2024 and sell it today you would earn a total of 627.00 from holding Flex or generate 18.3% 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. Flex
Performance |
| Timeline |
| Ihuman Inc |
| Flex |
Ihuman and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Flex
The main advantage of trading using opposite Ihuman and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Ihuman vs. Jianzhi Education Technology | Ihuman vs. 17 Education Technology | Ihuman vs. Elite Education Group | Ihuman vs. Wah Fu Education |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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