Correlation Between HUMANA and American Balanced
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By analyzing existing cross correlation between HUMANA INC and American Balanced Fund, you can compare the effects of market volatilities on HUMANA and American Balanced 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 American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and American Balanced.
Diversification Opportunities for HUMANA and American Balanced
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and American is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced 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 American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of HUMANA i.e., HUMANA and American Balanced go up and down completely randomly.
Pair Corralation between HUMANA and American Balanced
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the American Balanced. In addition to that, HUMANA is 1.54 times more volatile than American Balanced Fund. It trades about -0.16 of its total potential returns per unit of risk. American Balanced Fund is currently generating about 0.08 per unit of volatility. If you would invest 3,622 in American Balanced Fund on August 29, 2024 and sell it today you would earn a total of 53.00 from holding American Balanced Fund or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.02% |
| Values | Daily Returns |
HUMANA INC vs. American Balanced Fund
Performance |
| Timeline |
| HUMANA INC |
| American Balanced |
HUMANA and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and American Balanced
The main advantage of trading using opposite HUMANA and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, American Balanced 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 American Balanced will offset losses from the drop in American Balanced's long position.The idea behind HUMANA INC and American Balanced Fund 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.| American Balanced vs. American Balanced Fund | American Balanced vs. American Balanced Fund | American Balanced vs. HUMANA INC | American Balanced vs. Aquagold International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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