Correlation Between APPLIED and Ihuman

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

By analyzing existing cross correlation between APPLIED MATLS INC and Ihuman Inc, you can compare the effects of market volatilities on APPLIED 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 APPLIED with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED and Ihuman.

Diversification Opportunities for APPLIED and Ihuman

-0.1

Correlation Coefficient

APPLIED  Ihuman

Good diversification

The 3 months correlation between APPLIED and Ihuman is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATLS INC and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and APPLIED 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 APPLIED MATLS 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 APPLIED i.e., APPLIED and Ihuman go up and down completely randomly.

Pair Corralation between APPLIED and Ihuman

Assuming the 90 days trading horizon APPLIED is expected to generate 56.57 times less return on investment than Ihuman. But when comparing it to its historical volatility, APPLIED MATLS INC is 4.41 times less risky than Ihuman. It trades about 0.0 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Ihuman Inc on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Ihuman Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

APPLIED MATLS INC  vs.  Ihuman Inc

APPLIED MATLS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APPLIED MATLS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APPLIED is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Ihuman Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Ihuman is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with APPLIED and Ihuman

The main advantage of trading using opposite APPLIED and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED 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 APPLIED MATLS 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.