Correlation Between HUMANA and Cascades
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By analyzing existing cross correlation between HUMANA INC and Cascades, you can compare the effects of market volatilities on HUMANA and Cascades 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 Cascades. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Cascades.
Diversification Opportunities for HUMANA and Cascades
Pay attention - limited upside
The 3 months correlation between HUMANA and Cascades is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Cascades in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascades 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 Cascades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascades has no effect on the direction of HUMANA i.e., HUMANA and Cascades go up and down completely randomly.
Pair Corralation between HUMANA and Cascades
Assuming the 90 days trading horizon HUMANA INC is expected to generate 21.18 times more return on investment than Cascades. However, HUMANA is 21.18 times more volatile than Cascades. It trades about 0.07 of its potential returns per unit of risk. Cascades is currently generating about 0.05 per unit of risk. If you would invest 8,012 in HUMANA INC on September 2, 2024 and sell it today you would lose (317.00) from holding HUMANA INC or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.4% |
| Values | Daily Returns |
HUMANA INC vs. Cascades
Performance |
| Timeline |
| HUMANA INC |
| Cascades |
HUMANA and Cascades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Cascades
The main advantage of trading using opposite HUMANA and Cascades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Cascades 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 Cascades will offset losses from the drop in Cascades' long position.The idea behind HUMANA INC and Cascades 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.| Cascades vs. South32 Limited | Cascades vs. NioCorp Developments Ltd | Cascades vs. HUMANA INC | Cascades vs. SCOR PK |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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