Correlation Between Humana and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Humana and Angel Oak 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 Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Angel Oak Ultrashort, you can compare the effects of market volatilities on Humana and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Angel Oak.
Diversification Opportunities for Humana and Angel Oak
Excellent diversification
The 3 months correlation between Humana and Angel is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Ultrashort has no effect on the direction of Humana i.e., Humana and Angel Oak go up and down completely randomly.
Pair Corralation between Humana and Angel Oak
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Angel Oak. In addition to that, Humana is 32.12 times more volatile than Angel Oak Ultrashort. It trades about -0.04 of its total potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.39 per unit of volatility. If you would invest 4,505 in Angel Oak Ultrashort on August 26, 2024 and sell it today you would earn a total of 615.00 from holding Angel Oak Ultrashort or generate 13.65% 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. Angel Oak Ultrashort
Performance |
| Timeline |
| Humana Inc |
| Angel Oak Ultrashort |
Humana and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Angel Oak
The main advantage of trading using opposite Humana and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Angel Oak vs. First Trust Low | Angel Oak vs. First Trust Senior | Angel Oak vs. First Trust TCW | Angel Oak vs. First Trust Tactical |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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