Correlation Between Tandem Diabetes and HUMANA
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By analyzing existing cross correlation between Tandem Diabetes Care and HUMANA INC, you can compare the effects of market volatilities on Tandem Diabetes 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 Tandem Diabetes with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandem Diabetes and HUMANA.
Diversification Opportunities for Tandem Diabetes and HUMANA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tandem and HUMANA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and HUMANA go up and down completely randomly.
Pair Corralation between Tandem Diabetes and HUMANA
Given the investment horizon of 90 days Tandem Diabetes is expected to generate 101.35 times less return on investment than HUMANA. But when comparing it to its historical volatility, Tandem Diabetes Care is 19.21 times less risky than HUMANA. It trades about 0.01 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 8,188 in HUMANA INC on October 23, 2024 and sell it today you would earn a total of 256.00 from holding HUMANA INC or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.95% |
| Values | Daily Returns |
Tandem Diabetes Care vs. HUMANA INC
Performance |
| Timeline |
| Tandem Diabetes Care |
| HUMANA INC |
Tandem Diabetes and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tandem Diabetes and HUMANA
The main advantage of trading using opposite Tandem Diabetes and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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.| Tandem Diabetes vs. DexCom Inc | Tandem Diabetes vs. Inspire Medical Systems | Tandem Diabetes vs. Penumbra | Tandem Diabetes vs. Insulet |
| HUMANA vs. Playa Hotels Resorts | HUMANA vs. The Cheesecake Factory | HUMANA vs. RLJ Lodging Trust | HUMANA vs. Weibo 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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