Correlation Between Southern Michigan and HUMANA
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By analyzing existing cross correlation between Southern Michigan Bancorp and HUMANA INC, you can compare the effects of market volatilities on Southern Michigan 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 Southern Michigan with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Michigan and HUMANA.
Diversification Opportunities for Southern Michigan and HUMANA
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southern and HUMANA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Southern Michigan Bancorp and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Southern Michigan 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 Southern Michigan Bancorp 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 Southern Michigan i.e., Southern Michigan and HUMANA go up and down completely randomly.
Pair Corralation between Southern Michigan and HUMANA
Given the investment horizon of 90 days Southern Michigan is expected to generate 129.98 times less return on investment than HUMANA. But when comparing it to its historical volatility, Southern Michigan Bancorp is 28.29 times less risky than HUMANA. It trades about 0.02 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,074 in HUMANA INC on September 3, 2024 and sell it today you would lose (39.00) from holding HUMANA INC or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.61% |
| Values | Daily Returns |
Southern Michigan Bancorp vs. HUMANA INC
Performance |
| Timeline |
| Southern Michigan Bancorp |
| HUMANA INC |
Southern Michigan and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Michigan and HUMANA
The main advantage of trading using opposite Southern Michigan and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Michigan 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.| Southern Michigan vs. Western Asset Global | Southern Michigan vs. Invesco Trust For | Southern Michigan vs. Logan Ridge Finance | Southern Michigan vs. Invesco Advantage MIT |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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