Correlation Between ClimateRock Right and HUMANA

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Can any of the company-specific risk be diversified away by investing in both ClimateRock Right 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 ClimateRock Right and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClimateRock Right and HUMANA INC, you can compare the effects of market volatilities on ClimateRock Right 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 ClimateRock Right with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClimateRock Right and HUMANA.

Diversification Opportunities for ClimateRock Right and HUMANA

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between ClimateRock and HUMANA is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ClimateRock Right and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and ClimateRock Right 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 ClimateRock Right 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 ClimateRock Right i.e., ClimateRock Right and HUMANA go up and down completely randomly.

Pair Corralation between ClimateRock Right and HUMANA

Assuming the 90 days horizon ClimateRock Right is expected to under-perform the HUMANA. In addition to that, ClimateRock Right is 24.28 times more volatile than HUMANA INC. It trades about -0.21 of its total potential returns per unit of risk. HUMANA INC is currently generating about -0.16 per unit of volatility. If you would invest  8,198  in HUMANA INC on September 13, 2024 and sell it today you would lose (503.00) from holding HUMANA INC or give up 6.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy22.5%
ValuesDaily Returns

ClimateRock Right  vs.  HUMANA INC

 Performance 
       Timeline  
ClimateRock Right 

Risk-Adjusted Performance

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Over the last 90 days ClimateRock Right has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
HUMANA INC 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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 HUMANA INC investors.

ClimateRock Right and HUMANA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ClimateRock Right and HUMANA

The main advantage of trading using opposite ClimateRock Right and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClimateRock Right 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.
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The idea behind ClimateRock Right 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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