Correlation Between Nextera Energy and Ihuman
Can any of the company-specific risk be diversified away by investing in both Nextera Energy 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 Nextera Energy and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextera Energy and Ihuman Inc, you can compare the effects of market volatilities on Nextera Energy 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 Nextera Energy with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextera Energy and Ihuman.
Diversification Opportunities for Nextera Energy and Ihuman
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nextera and Ihuman is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nextera Energy and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Nextera Energy 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 Nextera Energy 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 Nextera Energy i.e., Nextera Energy and Ihuman go up and down completely randomly.
Pair Corralation between Nextera Energy and Ihuman
Considering the 90-day investment horizon Nextera Energy is expected to under-perform the Ihuman. But the stock apears to be less risky and, when comparing its historical volatility, Nextera Energy is 2.65 times less risky than Ihuman. The stock trades about 0.0 of its potential returns per unit of risk. The Ihuman Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Ihuman Inc on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Ihuman Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextera Energy vs. Ihuman Inc
Performance |
| Timeline |
| Nextera Energy |
| Ihuman Inc |
Nextera Energy and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextera Energy and Ihuman
The main advantage of trading using opposite Nextera Energy and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextera Energy 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.| Nextera Energy vs. Ihuman Inc | Nextera Energy vs. Arrow Electronics | Nextera Energy vs. TFI International | Nextera Energy vs. Amkor Technology |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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