Correlation Between SoftBank Group and Humana
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Humana 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 SoftBank Group and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoftBank Group Corp and Humana Inc, you can compare the effects of market volatilities on SoftBank Group and Humana 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 SoftBank Group with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Humana.
Diversification Opportunities for SoftBank Group and Humana
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between SoftBank and Humana is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and SoftBank Group 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 SoftBank Group Corp are associated (or correlated) with Humana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humana Inc has no effect on the direction of SoftBank Group i.e., SoftBank Group and Humana go up and down completely randomly.
Pair Corralation between SoftBank Group and Humana
Assuming the 90 days trading horizon SoftBank Group Corp is expected to under-perform the Humana. In addition to that, SoftBank Group is 1.01 times more volatile than Humana Inc. It trades about -0.02 of its total potential returns per unit of risk. Humana Inc is currently generating about 0.2 per unit of volatility. If you would invest 26,063 in Humana Inc on August 26, 2024 and sell it today you would earn a total of 3,414 from holding Humana Inc or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
SoftBank Group Corp vs. Humana Inc
Performance |
| Timeline |
| SoftBank Group Corp |
| Humana Inc |
SoftBank Group and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Humana
The main advantage of trading using opposite SoftBank Group and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Humana 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 Humana will offset losses from the drop in Humana's long position.| SoftBank Group vs. Universal Display Corp | SoftBank Group vs. Federal Realty Investment | SoftBank Group vs. Fevertree Drinks Plc | SoftBank Group vs. Ebro Foods |
| Humana vs. Samsung Electronics Co | Humana vs. Samsung Electronics Co | Humana vs. Hyundai Motor | Humana vs. Toyota Motor Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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