Correlation Between HUMANA and Algoma Central
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By analyzing existing cross correlation between HUMANA INC and Algoma Central, you can compare the effects of market volatilities on HUMANA and Algoma Central 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 HUMANA with a short position of Algoma Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Algoma Central.
Diversification Opportunities for HUMANA and Algoma Central
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Algoma is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Algoma Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Central and HUMANA 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 HUMANA INC are associated (or correlated) with Algoma Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Central has no effect on the direction of HUMANA i.e., HUMANA and Algoma Central go up and down completely randomly.
Pair Corralation between HUMANA and Algoma Central
Assuming the 90 days trading horizon HUMANA is expected to generate 2.22 times less return on investment than Algoma Central. But when comparing it to its historical volatility, HUMANA INC is 1.88 times less risky than Algoma Central. It trades about 0.02 of its potential returns per unit of risk. Algoma Central is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,054 in Algoma Central on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Algoma Central or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.9% |
| Values | Daily Returns |
HUMANA INC vs. Algoma Central
Performance |
| Timeline |
| HUMANA INC |
| Algoma Central |
HUMANA and Algoma Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Algoma Central
The main advantage of trading using opposite HUMANA and Algoma Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Algoma Central 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 Algoma Central will offset losses from the drop in Algoma Central's long position.| HUMANA vs. JetBlue Airways Corp | HUMANA vs. Air Transport Services | HUMANA vs. Sun Life Financial | HUMANA vs. Bank of America |
| Algoma Central vs. TOMI Environmental Solutions | Algoma Central vs. SCOR PK | Algoma Central vs. HUMANA INC | Algoma Central vs. Aquagold International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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