Correlation Between HUMANA and Drilling Tools
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By analyzing existing cross correlation between HUMANA INC and Drilling Tools International, you can compare the effects of market volatilities on HUMANA and Drilling Tools 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 Drilling Tools. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Drilling Tools.
Diversification Opportunities for HUMANA and Drilling Tools
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HUMANA and Drilling is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Drilling Tools International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drilling Tools Inter 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 Drilling Tools. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drilling Tools Inter has no effect on the direction of HUMANA i.e., HUMANA and Drilling Tools go up and down completely randomly.
Pair Corralation between HUMANA and Drilling Tools
Assuming the 90 days trading horizon HUMANA is expected to generate 6.93 times less return on investment than Drilling Tools. But when comparing it to its historical volatility, HUMANA INC is 7.08 times less risky than Drilling Tools. It trades about 0.02 of its potential returns per unit of risk. Drilling Tools International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Drilling Tools International on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Drilling Tools International or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.8% |
| Values | Daily Returns |
HUMANA INC vs. Drilling Tools International
Performance |
| Timeline |
| HUMANA INC |
| Drilling Tools Inter |
HUMANA and Drilling Tools Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Drilling Tools
The main advantage of trading using opposite HUMANA and Drilling Tools positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Drilling Tools 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 Drilling Tools will offset losses from the drop in Drilling Tools' long position.| HUMANA vs. Drilling Tools International | HUMANA vs. Delek Drilling | HUMANA vs. Vera Bradley | HUMANA vs. Duluth Holdings |
| Drilling Tools vs. Waters | Drilling Tools vs. BioNTech SE | Drilling Tools vs. Centessa Pharmaceuticals PLC | Drilling Tools vs. Repligen |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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