Correlation Between Humana and SGI Dynamic
Can any of the company-specific risk be diversified away by investing in both Humana and SGI Dynamic 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 SGI Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and SGI Dynamic Tactical, you can compare the effects of market volatilities on Humana and SGI Dynamic 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 SGI Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and SGI Dynamic.
Diversification Opportunities for Humana and SGI Dynamic
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and SGI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and SGI Dynamic Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Dynamic Tactical 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 SGI Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Dynamic Tactical has no effect on the direction of Humana i.e., Humana and SGI Dynamic go up and down completely randomly.
Pair Corralation between Humana and SGI Dynamic
Considering the 90-day investment horizon Humana Inc is expected to generate 4.04 times more return on investment than SGI Dynamic. However, Humana is 4.04 times more volatile than SGI Dynamic Tactical. It trades about 0.25 of its potential returns per unit of risk. SGI Dynamic Tactical is currently generating about 0.33 per unit of risk. If you would invest 25,555 in Humana Inc on September 3, 2024 and sell it today you would earn a total of 4,083 from holding Humana Inc or generate 15.98% 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. SGI Dynamic Tactical
Performance |
| Timeline |
| Humana Inc |
| SGI Dynamic Tactical |
Humana and SGI Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and SGI Dynamic
The main advantage of trading using opposite Humana and SGI Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, SGI Dynamic 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 SGI Dynamic will offset losses from the drop in SGI Dynamic's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| SGI Dynamic vs. iShares Core Aggressive | SGI Dynamic vs. Tidal Trust II | SGI Dynamic vs. SPDR SSgA Multi Asset | SGI Dynamic vs. SPDR SSgA Global |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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