Correlation Between Humana and Tradr 2X
Can any of the company-specific risk be diversified away by investing in both Humana and Tradr 2X 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 Tradr 2X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Tradr 2X Long, you can compare the effects of market volatilities on Humana and Tradr 2X 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 Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Tradr 2X.
Diversification Opportunities for Humana and Tradr 2X
Very good diversification
The 3 months correlation between Humana and Tradr is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long 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 Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of Humana i.e., Humana and Tradr 2X go up and down completely randomly.
Pair Corralation between Humana and Tradr 2X
Considering the 90-day investment horizon Humana Inc is expected to generate 1.6 times more return on investment than Tradr 2X. However, Humana is 1.6 times more volatile than Tradr 2X Long. It trades about 0.23 of its potential returns per unit of risk. Tradr 2X Long is currently generating about 0.23 per unit of risk. If you would invest 25,783 in Humana Inc on September 1, 2024 and sell it today you would earn a total of 3,855 from holding Humana Inc or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Humana Inc vs. Tradr 2X Long
Performance |
| Timeline |
| Humana Inc |
| Tradr 2X Long |
Humana and Tradr 2X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Tradr 2X
The main advantage of trading using opposite Humana and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Tradr 2X 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 Tradr 2X will offset losses from the drop in Tradr 2X's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Tradr 2X vs. FT Vest Equity | Tradr 2X vs. Northern Lights | Tradr 2X vs. Dimensional International High | Tradr 2X vs. Matthews China Discovery |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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