Correlation Between Ecclesiastical Insurance and Humana
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance 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 Ecclesiastical Insurance and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and Humana Inc, you can compare the effects of market volatilities on Ecclesiastical Insurance 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 Ecclesiastical Insurance with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Humana.
Diversification Opportunities for Ecclesiastical Insurance and Humana
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecclesiastical and Humana is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Humana go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Humana
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to under-perform the Humana. But the stock apears to be less risky and, when comparing its historical volatility, Ecclesiastical Insurance Office is 2.46 times less risky than Humana. The stock trades about -0.06 of its potential returns per unit of risk. The Humana Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 26,063 in Humana Inc on August 26, 2024 and sell it today you would earn a total of 3,414 from holding Humana Inc or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Humana Inc
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Humana Inc |
Ecclesiastical Insurance and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Humana
The main advantage of trading using opposite Ecclesiastical Insurance and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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.| Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Hyundai Motor | Ecclesiastical Insurance vs. Toyota Motor Corp |
| Humana vs. CAP LEASE AVIATION | Humana vs. Cairn Homes PLC | Humana vs. Martin Marietta Materials | Humana vs. Ecclesiastical Insurance Office |
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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