Correlation Between American Shared and Humana
Can any of the company-specific risk be diversified away by investing in both American Shared 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 American Shared and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shared Hospital and Humana Inc, you can compare the effects of market volatilities on American Shared 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 American Shared with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and Humana.
Diversification Opportunities for American Shared and Humana
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Humana is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and American Shared 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 American Shared Hospital 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 American Shared i.e., American Shared and Humana go up and down completely randomly.
Pair Corralation between American Shared and Humana
Considering the 90-day investment horizon American Shared Hospital is expected to generate 1.05 times more return on investment than Humana. However, American Shared is 1.05 times more volatile than Humana Inc. It trades about 0.06 of its potential returns per unit of risk. Humana Inc is currently generating about -0.07 per unit of risk. If you would invest 245.00 in American Shared Hospital on September 4, 2024 and sell it today you would earn a total of 80.00 from holding American Shared Hospital or generate 32.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Shared Hospital vs. Humana Inc
Performance |
| Timeline |
| American Shared Hospital |
| Humana Inc |
American Shared and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shared and Humana
The main advantage of trading using opposite American Shared and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared 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.| American Shared vs. Humana Inc | American Shared vs. Cigna Corp | American Shared vs. Elevance Health | American Shared vs. Centene Corp |
| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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