Correlation Between PAK and HUMANA
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By analyzing existing cross correlation between PAK and HUMANA INC, you can compare the effects of market volatilities on PAK 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 PAK with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAK and HUMANA.
Diversification Opportunities for PAK and HUMANA
Very good diversification
The 3 months correlation between PAK and HUMANA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PAK and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and PAK 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 PAK 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 PAK i.e., PAK and HUMANA go up and down completely randomly.
Pair Corralation between PAK and HUMANA
Considering the 90-day investment horizon PAK is expected to under-perform the HUMANA. But the etf apears to be less risky and, when comparing its historical volatility, PAK is 45.36 times less risky than HUMANA. The etf trades about -0.04 of its potential returns per unit of risk. The HUMANA INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,012 in HUMANA INC on September 2, 2024 and sell it today you would lose (317.00) from holding HUMANA INC or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.05% |
| Values | Daily Returns |
PAK vs. HUMANA INC
Performance |
| Timeline |
| PAK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HUMANA INC |
PAK and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAK and HUMANA
The main advantage of trading using opposite PAK and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAK 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.The idea behind PAK and HUMANA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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