Correlation Between MTI Wireless and Humana
Can any of the company-specific risk be diversified away by investing in both MTI Wireless and Humana 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 MTI Wireless and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI Wireless Edge and Humana Inc, you can compare the effects of market volatilities on MTI Wireless 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 MTI Wireless with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Wireless and Humana.
Diversification Opportunities for MTI Wireless and Humana
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between MTI and Humana is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding MTI Wireless Edge and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and MTI Wireless 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 MTI Wireless Edge 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 MTI Wireless i.e., MTI Wireless and Humana go up and down completely randomly.
Pair Corralation between MTI Wireless and Humana
Assuming the 90 days trading horizon MTI Wireless Edge is expected to generate 0.62 times more return on investment than Humana. However, MTI Wireless Edge is 1.61 times less risky than Humana. It trades about 0.06 of its potential returns per unit of risk. Humana Inc is currently generating about -0.06 per unit of risk. If you would invest 4,200 in MTI Wireless Edge on September 2, 2024 and sell it today you would earn a total of 300.00 from holding MTI Wireless Edge or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Wireless Edge vs. Humana Inc
Performance |
| Timeline |
| MTI Wireless Edge |
| Humana Inc |
MTI Wireless and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Wireless and Humana
The main advantage of trading using opposite MTI Wireless and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Wireless 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.| MTI Wireless vs. Ross Stores | MTI Wireless vs. Uber Technologies | MTI Wireless vs. Ashtead Technology Holdings | MTI Wireless vs. Playtech Plc |
| Humana vs. Alaska Air Group | Humana vs. Microchip Technology | Humana vs. Pentair PLC | Humana vs. Porvair plc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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