Correlation Between Ihuman and BOEING

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

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

Diversification Opportunities for Ihuman and BOEING

-0.47

Correlation Coefficient

Ihuman  BOEING

Very good diversification

The 3 months correlation between Ihuman and BOEING is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and BOEING CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CO and Ihuman 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 Ihuman Inc are associated (or correlated) with BOEING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CO has no effect on the direction of Ihuman i.e., Ihuman and BOEING go up and down completely randomly.

Pair Corralation between Ihuman and BOEING

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 4.52 times more return on investment than BOEING. However, Ihuman is 4.52 times more volatile than BOEING CO. It trades about 0.0 of its potential returns per unit of risk. BOEING CO is currently generating about -0.01 per unit of risk. If you would invest  258.00  in Ihuman Inc on September 12, 2024 and sell it today you would lose (85.00) from holding Ihuman Inc or give up 32.95% of portfolio value over 90 days.

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

Ihuman Inc  vs.  BOEING CO

Ihuman Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

BOEING CO

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ihuman and BOEING

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

The idea behind Ihuman Inc and BOEING 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.