Correlation Between HUMANA and Diamond Hill
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By analyzing existing cross correlation between HUMANA INC and Diamond Hill Large, you can compare the effects of market volatilities on HUMANA and Diamond Hill 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 Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Diamond Hill.
Diversification Opportunities for HUMANA and Diamond Hill
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Diamond is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Diamond Hill Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Large 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 Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Large has no effect on the direction of HUMANA i.e., HUMANA and Diamond Hill go up and down completely randomly.
Pair Corralation between HUMANA and Diamond Hill
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Diamond Hill. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.19 times less risky than Diamond Hill. The bond trades about -0.07 of its potential returns per unit of risk. The Diamond Hill Large is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,646 in Diamond Hill Large on August 29, 2024 and sell it today you would earn a total of 121.00 from holding Diamond Hill Large or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
HUMANA INC vs. Diamond Hill Large
Performance |
| Timeline |
| HUMANA INC |
| Diamond Hill Large |
HUMANA and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Diamond Hill
The main advantage of trading using opposite HUMANA and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.The idea behind HUMANA INC and Diamond Hill Large 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.| Diamond Hill vs. Value Fund Investor | Diamond Hill vs. HUMANA INC | Diamond Hill vs. Aquagold International | Diamond Hill vs. Barloworld Ltd ADR |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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