Correlation Between Cornish Metals and Humana
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Humana Inc, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Humana.
Diversification Opportunities for Cornish Metals and Humana
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cornish and Humana is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and Humana go up and down completely randomly.
Pair Corralation between Cornish Metals and Humana
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.92 times more return on investment than Humana. However, Cornish Metals is 1.92 times more volatile than Humana Inc. It trades about 0.08 of its potential returns per unit of risk. Humana Inc is currently generating about -0.03 per unit of risk. If you would invest 790.00 in Cornish Metals on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Cornish Metals or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. Humana Inc
Performance |
| Timeline |
| Cornish Metals |
| Humana Inc |
Cornish Metals and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Humana
The main advantage of trading using opposite Cornish Metals and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Ferrexpo PLC | Cornish Metals vs. Atalaya Mining |
| Humana vs. SMA Solar Technology | Humana vs. Iron Mountain | Humana vs. X FAB Silicon Foundries | Humana vs. Polar Capital Technology |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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