Correlation Between Western Acquisition and Ihuman
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Ihuman Inc, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Ihuman.
Diversification Opportunities for Western Acquisition and Ihuman
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Ihuman is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and Ihuman go up and down completely randomly.
Pair Corralation between Western Acquisition and Ihuman
Given the investment horizon of 90 days Western Acquisition Ventures is expected to generate 0.72 times more return on investment than Ihuman. However, Western Acquisition Ventures is 1.4 times less risky than Ihuman. It trades about 0.05 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.18 per unit of risk. If you would invest 1,060 in Western Acquisition Ventures on August 28, 2024 and sell it today you would earn a total of 42.00 from holding Western Acquisition Ventures or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Ihuman Inc
Performance |
| Timeline |
| Western Acquisition |
| Ihuman Inc |
Western Acquisition and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Ihuman
The main advantage of trading using opposite Western Acquisition and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.| Western Acquisition vs. Aurora Innovation | Western Acquisition vs. HUMANA INC | Western Acquisition vs. Aquagold International | Western Acquisition vs. Barloworld Ltd ADR |
| Ihuman vs. Wah Fu Education | Ihuman vs. Golden Sun Education | Ihuman vs. Elite Education Group | Ihuman vs. QuantaSing Group Limited |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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