Correlation Between HUMANA and MFS Investment
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By analyzing existing cross correlation between HUMANA INC and MFS Investment Grade, you can compare the effects of market volatilities on HUMANA and MFS Investment 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 MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and MFS Investment.
Diversification Opportunities for HUMANA and MFS Investment
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and MFS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of HUMANA i.e., HUMANA and MFS Investment go up and down completely randomly.
Pair Corralation between HUMANA and MFS Investment
Assuming the 90 days trading horizon HUMANA INC is expected to generate 140.86 times more return on investment than MFS Investment. However, HUMANA is 140.86 times more volatile than MFS Investment Grade. It trades about 0.08 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.07 per unit of risk. If you would invest 8,036 in HUMANA INC on August 30, 2024 and sell it today you would lose (341.00) from holding HUMANA INC or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.43% |
| Values | Daily Returns |
HUMANA INC vs. MFS Investment Grade
Performance |
| Timeline |
| HUMANA INC |
| MFS Investment Grade |
HUMANA and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and MFS Investment
The main advantage of trading using opposite HUMANA and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.The idea behind HUMANA INC and MFS Investment Grade 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.| MFS Investment vs. Invesco High Income | MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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