Correlation Between Insuline Medical and Human Xtensions

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

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

Diversification Opportunities for Insuline Medical and Human Xtensions

0.47

Correlation Coefficient

Insuline Medical  Human Xtensions

Very weak diversification

The 3 months correlation between Insuline and Human is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Insuline Medical and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions and Insuline Medical 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 Insuline Medical 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 Insuline Medical i.e., Insuline Medical and Human Xtensions go up and down completely randomly.

Pair Corralation between Insuline Medical and Human Xtensions

Assuming the 90 days trading horizon Insuline Medical is expected to generate 1.04 times more return on investment than Human Xtensions. However, Insuline Medical is 1.04 times more volatile than Human Xtensions. It trades about -0.02 of its potential returns per unit of risk. Human Xtensions is currently generating about -0.18 per unit of risk. If you would invest  22,200  in Insuline Medical on September 28, 2024 and sell it today you would lose (2,600) from holding Insuline Medical or give up 11.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.87%
Values	Daily Returns

Insuline Medical  vs.  Human Xtensions

Insuline Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Insuline Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 Insuline Medical and Human Xtensions

The main advantage of trading using opposite Insuline Medical and Human Xtensions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insuline Medical 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 Insuline Medical 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.