Correlation Between Adgar Investments and Human Xtensions

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

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

Diversification Opportunities for Adgar Investments and Human Xtensions

-0.74

Correlation Coefficient

Adgar Investments  Human Xtensions

Pay attention - limited upside

The 3 months correlation between Adgar and Human is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Adgar Investments and and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions and Adgar Investments 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 Adgar Investments and are associated (or correlated) with Human Xtensions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Human Xtensions has no effect on the direction of Adgar Investments i.e., Adgar Investments and Human Xtensions go up and down completely randomly.

Pair Corralation between Adgar Investments and Human Xtensions

Assuming the 90 days trading horizon Adgar Investments and is expected to generate 0.29 times more return on investment than Human Xtensions. However, Adgar Investments and is 3.45 times less risky than Human Xtensions. It trades about 0.35 of its potential returns per unit of risk. Human Xtensions is currently generating about -0.18 per unit of risk. If you would invest  45,030  in Adgar Investments and on September 29, 2024 and sell it today you would earn a total of  12,930  from holding Adgar Investments and or generate 28.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Adgar Investments and  vs.  Human Xtensions

Adgar Investments

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Adgar Investments and are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adgar Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Human Xtensions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Human Xtensions 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 Adgar Investments and Human Xtensions

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

The idea behind Adgar Investments and and Human Xtensions 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.