Correlation Between Cairn Homes and Humana
Can any of the company-specific risk be diversified away by investing in both Cairn Homes 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 Cairn Homes and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and Humana Inc, you can compare the effects of market volatilities on Cairn Homes 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 Cairn Homes with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and Humana.
Diversification Opportunities for Cairn Homes and Humana
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cairn and Humana is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Cairn Homes 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 Cairn Homes PLC 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 Cairn Homes i.e., Cairn Homes and Humana go up and down completely randomly.
Pair Corralation between Cairn Homes and Humana
Assuming the 90 days trading horizon Cairn Homes PLC is expected to generate 0.82 times more return on investment than Humana. However, Cairn Homes PLC is 1.22 times less risky than Humana. It trades about 0.11 of its potential returns per unit of risk. Humana Inc is currently generating about -0.04 per unit of risk. If you would invest 6,713 in Cairn Homes PLC on August 30, 2024 and sell it today you would earn a total of 10,447 from holding Cairn Homes PLC or generate 155.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.2% |
| Values | Daily Returns |
Cairn Homes PLC vs. Humana Inc
Performance |
| Timeline |
| Cairn Homes PLC |
| Humana Inc |
Cairn Homes and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and Humana
The main advantage of trading using opposite Cairn Homes and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes 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.| Cairn Homes vs. Ondine Biomedical | Cairn Homes vs. Europa Metals | Cairn Homes vs. Lendinvest PLC | Cairn Homes vs. Neometals |
| Humana vs. Lendinvest PLC | Humana vs. Neometals | Humana vs. Albion Technology General | Humana vs. Jupiter Fund Management |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |