Correlation Between Vitru and Ihuman

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

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

Diversification Opportunities for Vitru and Ihuman

0.19

Correlation Coefficient

Vitru  Ihuman

Average diversification

The 3 months correlation between Vitru and Ihuman is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vitru and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Vitru 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 Vitru 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 Vitru i.e., Vitru and Ihuman go up and down completely randomly.

Pair Corralation between Vitru and Ihuman

Given the investment horizon of 90 days Vitru is expected to under-perform the Ihuman. But the stock apears to be less risky and, when comparing its historical volatility, Vitru is 1.39 times less risky than Ihuman. The stock trades about -0.05 of its potential returns per unit of risk. The Ihuman Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  187.00  in Ihuman Inc on September 4, 2024 and sell it today you would lose (20.00) from holding Ihuman Inc or give up 10.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	30.71%
Values	Daily Returns

Vitru  vs.  Ihuman Inc

Vitru

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vitru has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vitru is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private 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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Vitru and Ihuman

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

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.