Correlation Between Dow Jones and HUMANA
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By analyzing existing cross correlation between Dow Jones Industrial and HUMANA INC 395, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and HUMANA.
Diversification Opportunities for Dow Jones and HUMANA
Pay attention - limited upside
The 3 months correlation between Dow and HUMANA is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and HUMANA INC 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 5 and Dow Jones 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 Dow Jones Industrial 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 5 has no effect on the direction of Dow Jones i.e., Dow Jones and HUMANA go up and down completely randomly.
Pair Corralation between Dow Jones and HUMANA
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 3.13 times more return on investment than HUMANA. However, Dow Jones is 3.13 times more volatile than HUMANA INC 395. It trades about 0.16 of its potential returns per unit of risk. HUMANA INC 395 is currently generating about 0.03 per unit of risk. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. HUMANA INC 395
Performance |
| Timeline |
Dow Jones and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
HUMANA INC 395
Pair trading matchups for HUMANA
Pair Trading with Dow Jones and HUMANA
The main advantage of trading using opposite Dow Jones and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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