Correlation Between Saia and Ihuman
Can any of the company-specific risk be diversified away by investing in both Saia 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 Saia and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and Ihuman Inc, you can compare the effects of market volatilities on Saia 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 Saia with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Ihuman.
Diversification Opportunities for Saia and Ihuman
Good diversification
The 3 months correlation between Saia and Ihuman is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Saia 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 Saia Inc 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 Saia i.e., Saia and Ihuman go up and down completely randomly.
Pair Corralation between Saia and Ihuman
Given the investment horizon of 90 days Saia Inc is expected to generate 0.9 times more return on investment than Ihuman. However, Saia Inc is 1.11 times less risky than Ihuman. It trades about 0.05 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.04 per unit of risk. If you would invest 42,505 in Saia Inc on August 29, 2024 and sell it today you would earn a total of 13,933 from holding Saia Inc or generate 32.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saia Inc vs. Ihuman Inc
Performance |
| Timeline |
| Saia Inc |
| Ihuman Inc |
Saia and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saia and Ihuman
The main advantage of trading using opposite Saia and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia 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.The idea behind Saia Inc and Ihuman Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ihuman vs. Gaotu Techedu DRC | Ihuman vs. TAL Education Group | Ihuman vs. Strategic Education | Ihuman vs. Vasta Platform |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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