Correlation Between BRC and HUMANA
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By analyzing existing cross correlation between BRC Inc and HUMANA INC, you can compare the effects of market volatilities on BRC 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 BRC with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRC and HUMANA.
Diversification Opportunities for BRC and HUMANA
Very weak diversification
The 3 months correlation between BRC and HUMANA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BRC Inc and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and BRC 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 BRC Inc 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 BRC i.e., BRC and HUMANA go up and down completely randomly.
Pair Corralation between BRC and HUMANA
Given the investment horizon of 90 days BRC Inc is expected to generate 4.18 times more return on investment than HUMANA. However, BRC is 4.18 times more volatile than HUMANA INC. It trades about 0.0 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.05 per unit of risk. If you would invest 316.00 in BRC Inc on September 5, 2024 and sell it today you would lose (3.00) from holding BRC Inc or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
BRC Inc vs. HUMANA INC
Performance |
| Timeline |
| BRC Inc |
| HUMANA INC |
BRC and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRC and HUMANA
The main advantage of trading using opposite BRC and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRC 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.The idea behind BRC Inc and HUMANA 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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