Correlation Between Kuke Music and Ihuman
Can any of the company-specific risk be diversified away by investing in both Kuke Music 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 Kuke Music and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuke Music Holding and Ihuman Inc, you can compare the effects of market volatilities on Kuke Music 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 Kuke Music with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Ihuman.
Diversification Opportunities for Kuke Music and Ihuman
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kuke and Ihuman is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Kuke Music 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 Kuke Music Holding 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 Kuke Music i.e., Kuke Music and Ihuman go up and down completely randomly.
Pair Corralation between Kuke Music and Ihuman
Given the investment horizon of 90 days Kuke Music Holding is expected to generate 4.0 times more return on investment than Ihuman. However, Kuke Music is 4.0 times more volatile than Ihuman Inc. It trades about 0.15 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.05 per unit of risk. If you would invest 37.00 in Kuke Music Holding on October 19, 2024 and sell it today you would earn a total of 11.00 from holding Kuke Music Holding or generate 29.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuke Music Holding vs. Ihuman Inc
Performance |
| Timeline |
| Kuke Music Holding |
| Ihuman Inc |
Kuke Music and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuke Music and Ihuman
The main advantage of trading using opposite Kuke Music and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music 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.| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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