Correlation Between HUMANA and Balchem
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By analyzing existing cross correlation between HUMANA INC and Balchem, you can compare the effects of market volatilities on HUMANA and Balchem 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 Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Balchem.
Diversification Opportunities for HUMANA and Balchem
Very good diversification
The 3 months correlation between HUMANA and Balchem is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem 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 Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of HUMANA i.e., HUMANA and Balchem go up and down completely randomly.
Pair Corralation between HUMANA and Balchem
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Balchem. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.4 times less risky than Balchem. The bond trades about -0.06 of its potential returns per unit of risk. The Balchem is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 16,926 in Balchem on August 30, 2024 and sell it today you would earn a total of 1,306 from holding Balchem or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
HUMANA INC vs. Balchem
Performance |
| Timeline |
| HUMANA INC |
| Balchem |
HUMANA and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Balchem
The main advantage of trading using opposite HUMANA and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.| HUMANA vs. Brandywine Realty Trust | HUMANA vs. Celsius Holdings | HUMANA vs. Uber Technologies | HUMANA vs. PepsiCo |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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