Correlation Between HUMANA and American Beacon
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By analyzing existing cross correlation between HUMANA INC and American Beacon International, you can compare the effects of market volatilities on HUMANA and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and American Beacon.
Diversification Opportunities for HUMANA and American Beacon
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HUMANA and American is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and American Beacon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Inte 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Inte has no effect on the direction of HUMANA i.e., HUMANA and American Beacon go up and down completely randomly.
Pair Corralation between HUMANA and American Beacon
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the American Beacon. In addition to that, HUMANA is 1.31 times more volatile than American Beacon International. It trades about -0.22 of its total potential returns per unit of risk. American Beacon International is currently generating about -0.2 per unit of volatility. If you would invest 1,944 in American Beacon International on August 30, 2024 and sell it today you would lose (74.00) from holding American Beacon International or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
HUMANA INC vs. American Beacon International
Performance |
| Timeline |
| HUMANA INC |
| American Beacon Inte |
HUMANA and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and American Beacon
The main advantage of trading using opposite HUMANA and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.The idea behind HUMANA INC and American Beacon International 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.| American Beacon vs. HUMANA INC | American Beacon vs. Aquagold International | American Beacon vs. Barloworld Ltd ADR | American Beacon 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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