Correlation Between Davis Financial and HUMANA
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By analyzing existing cross correlation between Davis Financial Fund and HUMANA INC, you can compare the effects of market volatilities on Davis Financial 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 Davis Financial with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Financial and HUMANA.
Diversification Opportunities for Davis Financial and HUMANA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Davis and HUMANA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial Fund and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Davis Financial 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 Davis Financial Fund 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 Davis Financial i.e., Davis Financial and HUMANA go up and down completely randomly.
Pair Corralation between Davis Financial and HUMANA
Assuming the 90 days horizon Davis Financial Fund is expected to generate 0.88 times more return on investment than HUMANA. However, Davis Financial Fund is 1.13 times less risky than HUMANA. It trades about -0.05 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.09 per unit of risk. If you would invest 6,838 in Davis Financial Fund on November 27, 2024 and sell it today you would lose (56.00) from holding Davis Financial Fund or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Davis Financial Fund vs. HUMANA INC
Performance |
| Timeline |
| Davis Financial |
| HUMANA INC |
Davis Financial and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Davis Financial and HUMANA
The main advantage of trading using opposite Davis Financial and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Davis Financial 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.| Davis Financial vs. Glg Intl Small | Davis Financial vs. Rbc Emerging Markets | Davis Financial vs. Barings Active Short | Davis Financial vs. Intal High Relative |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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