Correlation Between Newpark Resources and HUMANA
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By analyzing existing cross correlation between Newpark Resources and HUMANA INC, you can compare the effects of market volatilities on Newpark Resources 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 Newpark Resources with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and HUMANA.
Diversification Opportunities for Newpark Resources and HUMANA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newpark and HUMANA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Newpark Resources 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 Newpark Resources 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 Newpark Resources i.e., Newpark Resources and HUMANA go up and down completely randomly.
Pair Corralation between Newpark Resources and HUMANA
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 2.1 times more return on investment than HUMANA. However, Newpark Resources is 2.1 times more volatile than HUMANA INC. It trades about 0.12 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.19 per unit of risk. If you would invest 743.00 in Newpark Resources on September 13, 2024 and sell it today you would earn a total of 45.00 from holding Newpark Resources or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Newpark Resources vs. HUMANA INC
Performance |
| Timeline |
| Newpark Resources |
| HUMANA INC |
Newpark Resources and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and HUMANA
The main advantage of trading using opposite Newpark Resources and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources 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.| Newpark Resources vs. Now Inc | Newpark Resources vs. Enerflex | Newpark Resources vs. Bristow Group | Newpark Resources vs. Forum Energy Technologies |
| HUMANA vs. Morgan Stanley | HUMANA vs. Infosys Ltd ADR | HUMANA vs. Citizens Bancorp Investment | HUMANA vs. Small Cap Premium |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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