Correlation Between Humana and Defiance Hotel
Can any of the company-specific risk be diversified away by investing in both Humana and Defiance Hotel 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 Defiance Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Defiance Hotel Airline, you can compare the effects of market volatilities on Humana and Defiance Hotel 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 Defiance Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Defiance Hotel.
Diversification Opportunities for Humana and Defiance Hotel
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Humana and Defiance is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Defiance Hotel Airline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Hotel Airline 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 Defiance Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Hotel Airline has no effect on the direction of Humana i.e., Humana and Defiance Hotel go up and down completely randomly.
Pair Corralation between Humana and Defiance Hotel
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Defiance Hotel. In addition to that, Humana is 1.86 times more volatile than Defiance Hotel Airline. It trades about -0.05 of its total potential returns per unit of risk. Defiance Hotel Airline is currently generating about 0.06 per unit of volatility. If you would invest 1,878 in Defiance Hotel Airline on November 27, 2024 and sell it today you would earn a total of 756.00 from holding Defiance Hotel Airline or generate 40.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Defiance Hotel Airline
Performance |
| Timeline |
| Humana Inc |
| Defiance Hotel Airline |
Humana and Defiance Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Defiance Hotel
The main advantage of trading using opposite Humana and Defiance Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Defiance Hotel 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 Defiance Hotel will offset losses from the drop in Defiance Hotel's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Defiance Hotel vs. Strategy Shares | Defiance Hotel vs. Freedom Day Dividend | Defiance Hotel vs. Franklin Templeton ETF | Defiance Hotel vs. iShares MSCI China |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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