Correlation Between HUMANA and Absa Group
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By analyzing existing cross correlation between HUMANA INC and Absa Group Ltd, you can compare the effects of market volatilities on HUMANA and Absa Group 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 Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Absa Group.
Diversification Opportunities for HUMANA and Absa Group
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and Absa is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Absa Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Group 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 Absa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Group has no effect on the direction of HUMANA i.e., HUMANA and Absa Group go up and down completely randomly.
Pair Corralation between HUMANA and Absa Group
Assuming the 90 days trading horizon HUMANA is expected to generate 65.11 times less return on investment than Absa Group. But when comparing it to its historical volatility, HUMANA INC is 4.21 times less risky than Absa Group. It trades about 0.0 of its potential returns per unit of risk. Absa Group Ltd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,667 in Absa Group Ltd on September 12, 2024 and sell it today you would earn a total of 558.00 from holding Absa Group Ltd or generate 33.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.38% |
| Values | Daily Returns |
HUMANA INC vs. Absa Group Ltd
Performance |
| Timeline |
| HUMANA INC |
| Absa Group |
HUMANA and Absa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Absa Group
The main advantage of trading using opposite HUMANA and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Absa Group 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 Absa Group will offset losses from the drop in Absa Group's long position.The idea behind HUMANA INC and Absa Group Ltd 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.| Absa Group vs. Freedom Bank of | Absa Group vs. HUMANA INC | Absa Group vs. Barloworld Ltd ADR | Absa Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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