Correlation Between RadNet and Humana
Can any of the company-specific risk be diversified away by investing in both RadNet 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 RadNet and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and Humana Inc, you can compare the effects of market volatilities on RadNet 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 RadNet with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and Humana.
Diversification Opportunities for RadNet and Humana
Very good diversification
The 3 months correlation between RadNet and Humana is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and RadNet 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 RadNet Inc 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 RadNet i.e., RadNet and Humana go up and down completely randomly.
Pair Corralation between RadNet and Humana
Given the investment horizon of 90 days RadNet Inc is expected to generate 1.17 times more return on investment than Humana. However, RadNet is 1.17 times more volatile than Humana Inc. It trades about 0.11 of its potential returns per unit of risk. Humana Inc is currently generating about -0.05 per unit of risk. If you would invest 3,166 in RadNet Inc on August 31, 2024 and sell it today you would earn a total of 5,010 from holding RadNet Inc or generate 158.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. Humana Inc
Performance |
| Timeline |
| RadNet Inc |
| Humana Inc |
RadNet and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and Humana
The main advantage of trading using opposite RadNet and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet 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.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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