Correlation Between Definitive Healthcare and HUMANA
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By analyzing existing cross correlation between Definitive Healthcare Corp and HUMANA INC, you can compare the effects of market volatilities on Definitive Healthcare 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 Definitive Healthcare with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and HUMANA.
Diversification Opportunities for Definitive Healthcare and HUMANA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Definitive and HUMANA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Definitive Healthcare 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 Definitive Healthcare Corp 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 Definitive Healthcare i.e., Definitive Healthcare and HUMANA go up and down completely randomly.
Pair Corralation between Definitive Healthcare and HUMANA
Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to generate 3.95 times more return on investment than HUMANA. However, Definitive Healthcare is 3.95 times more volatile than HUMANA INC. It trades about 0.18 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.15 per unit of risk. If you would invest 416.00 in Definitive Healthcare Corp on October 24, 2024 and sell it today you would earn a total of 55.00 from holding Definitive Healthcare Corp or generate 13.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Definitive Healthcare Corp vs. HUMANA INC
Performance |
| Timeline |
| Definitive Healthcare |
| HUMANA INC |
Definitive Healthcare and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Definitive Healthcare and HUMANA
The main advantage of trading using opposite Definitive Healthcare and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definitive Healthcare 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.| Definitive Healthcare vs. National Research Corp | Definitive Healthcare vs. Evolent Health | Definitive Healthcare vs. Simulations Plus | Definitive Healthcare vs. Privia Health Group |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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