Correlation Between HUMANA and Arax Holdings
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By analyzing existing cross correlation between HUMANA INC and Arax Holdings Corp, you can compare the effects of market volatilities on HUMANA and Arax Holdings 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 Arax Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Arax Holdings.
Diversification Opportunities for HUMANA and Arax Holdings
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HUMANA and Arax is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Arax Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arax Holdings Corp 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 Arax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arax Holdings Corp has no effect on the direction of HUMANA i.e., HUMANA and Arax Holdings go up and down completely randomly.
Pair Corralation between HUMANA and Arax Holdings
Assuming the 90 days trading horizon HUMANA is expected to generate 34.6 times less return on investment than Arax Holdings. But when comparing it to its historical volatility, HUMANA INC is 41.05 times less risky than Arax Holdings. It trades about 0.25 of its potential returns per unit of risk. Arax Holdings Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Arax Holdings Corp on October 24, 2024 and sell it today you would earn a total of 18.00 from holding Arax Holdings Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
HUMANA INC vs. Arax Holdings Corp
Performance |
| Timeline |
| HUMANA INC |
| Arax Holdings Corp |
HUMANA and Arax Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Arax Holdings
The main advantage of trading using opposite HUMANA and Arax Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Arax Holdings 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 Arax Holdings will offset losses from the drop in Arax Holdings' long position.| HUMANA vs. Daily Journal Corp | HUMANA vs. Pearson PLC ADR | HUMANA vs. Gannett Co | HUMANA vs. John Wiley Sons |
| Arax Holdings vs. Symbotic | Arax Holdings vs. Lionsgate Studios Corp | Arax Holdings vs. HUMANA INC | Arax Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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