Correlation Between Humana and Alpha Architect
Can any of the company-specific risk be diversified away by investing in both Humana and Alpha Architect 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 Humana and Alpha Architect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Alpha Architect 1 3, you can compare the effects of market volatilities on Humana and Alpha Architect 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 Humana with a short position of Alpha Architect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Alpha Architect.
Diversification Opportunities for Humana and Alpha Architect
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and Alpha is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Alpha Architect 1 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Architect 1 and Humana 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 Humana Inc are associated (or correlated) with Alpha Architect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Architect 1 has no effect on the direction of Humana i.e., Humana and Alpha Architect go up and down completely randomly.
Pair Corralation between Humana and Alpha Architect
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Alpha Architect. In addition to that, Humana is 90.83 times more volatile than Alpha Architect 1 3. It trades about -0.05 of its total potential returns per unit of risk. Alpha Architect 1 3 is currently generating about 0.81 per unit of volatility. If you would invest 10,140 in Alpha Architect 1 3 on August 30, 2024 and sell it today you would earn a total of 836.00 from holding Alpha Architect 1 3 or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Alpha Architect 1 3
Performance |
| Timeline |
| Humana Inc |
| Alpha Architect 1 |
Humana and Alpha Architect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Alpha Architect
The main advantage of trading using opposite Humana and Alpha Architect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Alpha Architect 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 Alpha Architect will offset losses from the drop in Alpha Architect's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Alpha Architect vs. Global X Funds | Alpha Architect vs. US Treasury 12 | Alpha Architect vs. Tidal Trust II | Alpha Architect vs. Franklin Liberty Treasury |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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