Correlation Between Ihuman and Lion One
Can any of the company-specific risk be diversified away by investing in both Ihuman and Lion One 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 Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Lion One Metals, you can compare the effects of market volatilities on Ihuman and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Lion One.
Diversification Opportunities for Ihuman and Lion One
Poor diversification
The 3 months correlation between Ihuman and Lion is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Ihuman i.e., Ihuman and Lion One go up and down completely randomly.
Pair Corralation between Ihuman and Lion One
Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 1.11 times more return on investment than Lion One. However, Ihuman is 1.11 times more volatile than Lion One Metals. It trades about 0.02 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.04 per unit of risk. If you would invest 185.00 in Ihuman Inc on September 2, 2024 and sell it today you would lose (20.00) from holding Ihuman Inc or give up 10.81% 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. Lion One Metals
Performance |
| Timeline |
| Ihuman Inc |
| Lion One Metals |
Ihuman and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Lion One
The main advantage of trading using opposite Ihuman and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Ihuman vs. Wah Fu Education | Ihuman vs. Golden Sun Education | Ihuman vs. Elite Education Group | Ihuman vs. American Public Education |
| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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