Correlation Between Transamerica International and HUMANA
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By analyzing existing cross correlation between Transamerica International Stock and HUMANA INC, you can compare the effects of market volatilities on Transamerica International 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 Transamerica International with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica International and HUMANA.
Diversification Opportunities for Transamerica International and HUMANA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transamerica and HUMANA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica International Sto and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Transamerica International 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 Transamerica International Stock 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 Transamerica International i.e., Transamerica International and HUMANA go up and down completely randomly.
Pair Corralation between Transamerica International and HUMANA
Assuming the 90 days horizon Transamerica International Stock is expected to generate 1.34 times more return on investment than HUMANA. However, Transamerica International is 1.34 times more volatile than HUMANA INC. It trades about -0.01 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.04 per unit of risk. If you would invest 1,255 in Transamerica International Stock on September 1, 2024 and sell it today you would lose (18.00) from holding Transamerica International Stock or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.64% |
| Values | Daily Returns |
Transamerica International Sto vs. HUMANA INC
Performance |
| Timeline |
| Transamerica International |
| HUMANA INC |
Transamerica International and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica International and HUMANA
The main advantage of trading using opposite Transamerica International and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica International 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.The idea behind Transamerica International Stock and HUMANA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Managers module to screen money managers from public funds and ETFs managed around the world.
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