Correlation Between Humana and Clarkston Founders
Can any of the company-specific risk be diversified away by investing in both Humana and Clarkston Founders 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 Clarkston Founders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Clarkston Founders, you can compare the effects of market volatilities on Humana and Clarkston Founders 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 Clarkston Founders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Clarkston Founders.
Diversification Opportunities for Humana and Clarkston Founders
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Clarkston is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Clarkston Founders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkston Founders 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 Clarkston Founders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkston Founders has no effect on the direction of Humana i.e., Humana and Clarkston Founders go up and down completely randomly.
Pair Corralation between Humana and Clarkston Founders
Considering the 90-day investment horizon Humana Inc is expected to generate 4.8 times more return on investment than Clarkston Founders. However, Humana is 4.8 times more volatile than Clarkston Founders. It trades about 0.21 of its potential returns per unit of risk. Clarkston Founders is currently generating about 0.27 per unit of risk. If you would invest 25,777 in Humana Inc on August 30, 2024 and sell it today you would earn a total of 3,891 from holding Humana Inc or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Clarkston Founders
Performance |
| Timeline |
| Humana Inc |
| Clarkston Founders |
Humana and Clarkston Founders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Clarkston Founders
The main advantage of trading using opposite Humana and Clarkston Founders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Clarkston Founders 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 Clarkston Founders will offset losses from the drop in Clarkston Founders' long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Clarkston Founders vs. FT Vest Equity | Clarkston Founders vs. Zillow Group Class | Clarkston Founders vs. Northern Lights | Clarkston Founders vs. VanEck Vectors Moodys |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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