Correlation Between PPHE Hotel and Humana
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel 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 PPHE Hotel and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Humana Inc, you can compare the effects of market volatilities on PPHE Hotel 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 PPHE Hotel with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Humana.
Diversification Opportunities for PPHE Hotel and Humana
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PPHE and Humana is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and PPHE Hotel 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 PPHE Hotel Group 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 PPHE Hotel i.e., PPHE Hotel and Humana go up and down completely randomly.
Pair Corralation between PPHE Hotel and Humana
Assuming the 90 days trading horizon PPHE Hotel Group is expected to generate 0.5 times more return on investment than Humana. However, PPHE Hotel Group is 2.02 times less risky than Humana. It trades about 0.07 of its potential returns per unit of risk. Humana Inc is currently generating about -0.04 per unit of risk. If you would invest 123,313 in PPHE Hotel Group on September 12, 2024 and sell it today you would earn a total of 7,687 from holding PPHE Hotel Group or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. Humana Inc
Performance |
| Timeline |
| PPHE Hotel Group |
| Humana Inc |
PPHE Hotel and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Humana
The main advantage of trading using opposite PPHE Hotel and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel 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.| PPHE Hotel vs. National Atomic Co | PPHE Hotel vs. OTP Bank Nyrt | PPHE Hotel vs. Samsung Electronics Co | PPHE Hotel vs. Samsung Electronics Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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