Correlation Between Humasis and Curo Holdings

Can any of the company-specific risk be diversified away by investing in both Humasis and Curo Holdings 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 Humasis and Curo Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Humasis Co and Curo Holdings Co, you can compare the effects of market volatilities on Humasis and Curo Holdings 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 Humasis with a short position of Curo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humasis and Curo Holdings.

Diversification Opportunities for Humasis and Curo Holdings

-0.61

Correlation Coefficient

Humasis  Curo Holdings

Excellent diversification

The 3 months correlation between Humasis and Curo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and Curo Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curo Holdings and Humasis 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 Humasis Co are associated (or correlated) with Curo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curo Holdings has no effect on the direction of Humasis i.e., Humasis and Curo Holdings go up and down completely randomly.

Pair Corralation between Humasis and Curo Holdings

Assuming the 90 days trading horizon Humasis Co is expected to generate 3.17 times more return on investment than Curo Holdings. However, Humasis is 3.17 times more volatile than Curo Holdings Co. It trades about -0.12 of its potential returns per unit of risk. Curo Holdings Co is currently generating about -0.86 per unit of risk. If you would invest  185,600  in Humasis Co on September 28, 2024 and sell it today you would lose (22,500) from holding Humasis Co or give up 12.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	28.57%
Values	Daily Returns

Humasis Co  vs.  Curo Holdings Co

Humasis

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Humasis Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Humasis may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Curo Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curo Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Humasis and Curo Holdings

The main advantage of trading using opposite Humasis and Curo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humasis position performs unexpectedly, Curo Holdings 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 Curo Holdings will offset losses from the drop in Curo Holdings' long position.

The idea behind Humasis Co and Curo Holdings Co 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.