Correlation Between HUMANA and ARK Next
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By analyzing existing cross correlation between HUMANA INC and ARK Next Generation, you can compare the effects of market volatilities on HUMANA and ARK Next 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 ARK Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and ARK Next.
Diversification Opportunities for HUMANA and ARK Next
Excellent diversification
The 3 months correlation between HUMANA and ARK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and ARK Next Generation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Next Generation 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 ARK Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Next Generation has no effect on the direction of HUMANA i.e., HUMANA and ARK Next go up and down completely randomly.
Pair Corralation between HUMANA and ARK Next
Assuming the 90 days trading horizon HUMANA is expected to generate 22.01 times less return on investment than ARK Next. But when comparing it to its historical volatility, HUMANA INC is 3.51 times less risky than ARK Next. It trades about 0.02 of its potential returns per unit of risk. ARK Next Generation is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,459 in ARK Next Generation on August 29, 2024 and sell it today you would earn a total of 3,292 from holding ARK Next Generation or generate 44.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
HUMANA INC vs. ARK Next Generation
Performance |
| Timeline |
| HUMANA INC |
| ARK Next Generation |
HUMANA and ARK Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and ARK Next
The main advantage of trading using opposite HUMANA and ARK Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, ARK Next 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 ARK Next will offset losses from the drop in ARK Next's long position.The idea behind HUMANA INC and ARK Next Generation 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.| ARK Next vs. ARK Autonomous Technology | ARK Next vs. ARK Genomic Revolution | ARK Next vs. ARK Fintech Innovation | ARK Next vs. ARK Innovation ETF |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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