Correlation Between HUMANA and Federated Government
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By analyzing existing cross correlation between HUMANA INC and Federated Government Ultrashort, you can compare the effects of market volatilities on HUMANA and Federated Government 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 Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Federated Government.
Diversification Opportunities for HUMANA and Federated Government
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and FEDERATED is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Federated Government Ultrashor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government 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 Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of HUMANA i.e., HUMANA and Federated Government go up and down completely randomly.
Pair Corralation between HUMANA and Federated Government
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Federated Government. In addition to that, HUMANA is 9.27 times more volatile than Federated Government Ultrashort. It trades about -0.16 of its total potential returns per unit of risk. Federated Government Ultrashort is currently generating about 0.07 per unit of volatility. If you would invest 975.00 in Federated Government Ultrashort on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Federated Government Ultrashort or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. Federated Government Ultrashor
Performance |
| Timeline |
| HUMANA INC |
| Federated Government |
HUMANA and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Federated Government
The main advantage of trading using opposite HUMANA and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Federated Government 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 Federated Government will offset losses from the drop in Federated Government's long position.The idea behind HUMANA INC and Federated Government Ultrashort 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.| Federated Government vs. Short Term Fund R | Federated Government vs. Putnam Ultra Short | Federated Government vs. HUMANA INC | Federated Government 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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