Correlation Between HUMANA and Aurora Innovation
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By analyzing existing cross correlation between HUMANA INC and Aurora Innovation, you can compare the effects of market volatilities on HUMANA and Aurora Innovation 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 Aurora Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Aurora Innovation.
Diversification Opportunities for HUMANA and Aurora Innovation
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Aurora is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Aurora Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Innovation 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 Aurora Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Innovation has no effect on the direction of HUMANA i.e., HUMANA and Aurora Innovation go up and down completely randomly.
Pair Corralation between HUMANA and Aurora Innovation
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Aurora Innovation. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 22.62 times less risky than Aurora Innovation. The bond trades about -0.07 of its potential returns per unit of risk. The Aurora Innovation is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Aurora Innovation on August 29, 2024 and sell it today you would lose (22.00) from holding Aurora Innovation or give up 18.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
HUMANA INC vs. Aurora Innovation
Performance |
| Timeline |
| HUMANA INC |
| Aurora Innovation |
HUMANA and Aurora Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Aurora Innovation
The main advantage of trading using opposite HUMANA and Aurora Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Aurora Innovation 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 Aurora Innovation will offset losses from the drop in Aurora Innovation's long position.The idea behind HUMANA INC and Aurora Innovation 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.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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