Correlation Between HUMANA and Central Securities
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By analyzing existing cross correlation between HUMANA INC and Central Securities, you can compare the effects of market volatilities on HUMANA and Central Securities 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 Central Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Central Securities.
Diversification Opportunities for HUMANA and Central Securities
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Central is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Central Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Securities 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 Central Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Securities has no effect on the direction of HUMANA i.e., HUMANA and Central Securities go up and down completely randomly.
Pair Corralation between HUMANA and Central Securities
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Central Securities. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.03 times less risky than Central Securities. The bond trades about -0.02 of its potential returns per unit of risk. The Central Securities is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,491 in Central Securities on September 2, 2024 and sell it today you would earn a total of 1,203 from holding Central Securities or generate 34.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
HUMANA INC vs. Central Securities
Performance |
| Timeline |
| HUMANA INC |
| Central Securities |
HUMANA and Central Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Central Securities
The main advantage of trading using opposite HUMANA and Central Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Central Securities 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 Central Securities will offset losses from the drop in Central Securities' long position.The idea behind HUMANA INC and Central Securities 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.| Central Securities vs. Visa Class A | Central Securities vs. Diamond Hill Investment | Central Securities vs. Distoken Acquisition | Central Securities vs. Associated Capital Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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