Correlation Between HUMANA and Akzo Nobel
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By analyzing existing cross correlation between HUMANA INC and Akzo Nobel NV, you can compare the effects of market volatilities on HUMANA and Akzo Nobel 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 Akzo Nobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Akzo Nobel.
Diversification Opportunities for HUMANA and Akzo Nobel
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Akzo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Akzo Nobel NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akzo Nobel NV 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 Akzo Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akzo Nobel NV has no effect on the direction of HUMANA i.e., HUMANA and Akzo Nobel go up and down completely randomly.
Pair Corralation between HUMANA and Akzo Nobel
Assuming the 90 days trading horizon HUMANA INC is expected to generate 36.78 times more return on investment than Akzo Nobel. However, HUMANA is 36.78 times more volatile than Akzo Nobel NV. It trades about 0.07 of its potential returns per unit of risk. Akzo Nobel NV is currently generating about -0.01 per unit of risk. If you would invest 8,028 in HUMANA INC on August 30, 2024 and sell it today you would lose (333.00) from holding HUMANA INC or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.84% |
| Values | Daily Returns |
HUMANA INC vs. Akzo Nobel NV
Performance |
| Timeline |
| HUMANA INC |
| Akzo Nobel NV |
HUMANA and Akzo Nobel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Akzo Nobel
The main advantage of trading using opposite HUMANA and Akzo Nobel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Akzo Nobel 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 Akzo Nobel will offset losses from the drop in Akzo Nobel's long position.The idea behind HUMANA INC and Akzo Nobel NV 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.| Akzo Nobel vs. Avoca LLC | Akzo Nobel vs. AGC Inc ADR | Akzo Nobel vs. Arkema SA ADR | Akzo Nobel vs. AirBoss of America |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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