Correlation Between REDFLEX HOLDINGS and Ihuman
Can any of the company-specific risk be diversified away by investing in both REDFLEX HOLDINGS 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 REDFLEX HOLDINGS and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REDFLEX HOLDINGS LTD and Ihuman Inc, you can compare the effects of market volatilities on REDFLEX HOLDINGS 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 REDFLEX HOLDINGS with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of REDFLEX HOLDINGS and Ihuman.
Diversification Opportunities for REDFLEX HOLDINGS and Ihuman
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between REDFLEX and Ihuman is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding REDFLEX HOLDINGS LTD and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and REDFLEX HOLDINGS 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 REDFLEX HOLDINGS LTD 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 REDFLEX HOLDINGS i.e., REDFLEX HOLDINGS and Ihuman go up and down completely randomly.
Pair Corralation between REDFLEX HOLDINGS and Ihuman
Assuming the 90 days horizon REDFLEX HOLDINGS LTD is expected to under-perform the Ihuman. In addition to that, REDFLEX HOLDINGS is 5.67 times more volatile than Ihuman Inc. It trades about -0.15 of its total potential returns per unit of risk. Ihuman Inc is currently generating about -0.01 per unit of volatility. If you would invest 173.00 in Ihuman Inc on September 12, 2024 and sell it today you would lose (2.00) from holding Ihuman Inc or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REDFLEX HOLDINGS LTD vs. Ihuman Inc
Performance |
| Timeline |
| REDFLEX HOLDINGS LTD |
| Ihuman Inc |
REDFLEX HOLDINGS and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REDFLEX HOLDINGS and Ihuman
The main advantage of trading using opposite REDFLEX HOLDINGS and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REDFLEX HOLDINGS 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.| REDFLEX HOLDINGS vs. Qubec Nickel Corp | REDFLEX HOLDINGS vs. IGO Limited | REDFLEX HOLDINGS vs. Focus Graphite | REDFLEX HOLDINGS vs. Mineral Res |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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