Correlation Between American Century and HUMANA
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By analyzing existing cross correlation between American Century Diversified and HUMANA INC, you can compare the effects of market volatilities on American Century and HUMANA 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 American Century with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and HUMANA.
Diversification Opportunities for American Century and HUMANA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and HUMANA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Century Diversified and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and American Century 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 American Century Diversified are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of American Century i.e., American Century and HUMANA go up and down completely randomly.
Pair Corralation between American Century and HUMANA
Given the investment horizon of 90 days American Century Diversified is expected to generate 0.62 times more return on investment than HUMANA. However, American Century Diversified is 1.6 times less risky than HUMANA. It trades about 0.08 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.02 per unit of risk. If you would invest 4,423 in American Century Diversified on August 23, 2024 and sell it today you would earn a total of 219.00 from holding American Century Diversified or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.35% |
| Values | Daily Returns |
American Century Diversified vs. HUMANA INC
Performance |
| Timeline |
| American Century Div |
| HUMANA INC |
American Century and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and HUMANA
The main advantage of trading using opposite American Century and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.| American Century vs. SPDR Barclays Short | American Century vs. SPDR Bloomberg Emerging | American Century vs. SPDR Barclays Long | American Century vs. SPDR Barclays Short |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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