Correlation Between Sierra Strategic and HUMANA
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By analyzing existing cross correlation between Sierra Strategic Income and HUMANA INC, you can compare the effects of market volatilities on Sierra Strategic 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 Sierra Strategic with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Strategic and HUMANA.
Diversification Opportunities for Sierra Strategic and HUMANA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sierra and HUMANA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Strategic Income and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Sierra Strategic 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 Sierra Strategic Income 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 Sierra Strategic i.e., Sierra Strategic and HUMANA go up and down completely randomly.
Pair Corralation between Sierra Strategic and HUMANA
Assuming the 90 days horizon Sierra Strategic is expected to generate 440.56 times less return on investment than HUMANA. But when comparing it to its historical volatility, Sierra Strategic Income is 350.37 times less risky than HUMANA. It trades about 0.06 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 8,028 in HUMANA INC on August 30, 2024 and sell it today you would lose (333.00) from holding HUMANA INC or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.74% |
| Values | Daily Returns |
Sierra Strategic Income vs. HUMANA INC
Performance |
| Timeline |
| Sierra Strategic Income |
| HUMANA INC |
Sierra Strategic and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Strategic and HUMANA
The main advantage of trading using opposite Sierra Strategic and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Strategic 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.| Sierra Strategic vs. HUMANA INC | Sierra Strategic vs. Aquagold International | Sierra Strategic vs. Barloworld Ltd ADR | Sierra Strategic vs. Morningstar Unconstrained Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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