Correlation Between HUMANA and Federated Max-cap
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By analyzing existing cross correlation between HUMANA INC and Federated Max Cap Index, you can compare the effects of market volatilities on HUMANA and Federated Max-cap 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 Max-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Federated Max-cap.
Diversification Opportunities for HUMANA and Federated Max-cap
0.7 | Correlation Coefficient |
Poor 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 Max Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Max Cap 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 Max-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Max Cap has no effect on the direction of HUMANA i.e., HUMANA and Federated Max-cap go up and down completely randomly.
Pair Corralation between HUMANA and Federated Max-cap
Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.52 times more return on investment than Federated Max-cap. However, HUMANA INC is 1.93 times less risky than Federated Max-cap. It trades about -0.03 of its potential returns per unit of risk. Federated Max Cap Index is currently generating about -0.05 per unit of risk. If you would invest 8,090 in HUMANA INC on December 3, 2024 and sell it today you would lose (191.00) from holding HUMANA INC or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUMANA INC vs. Federated Max Cap Index
Performance |
| Timeline |
| HUMANA INC |
| Federated Max Cap |
HUMANA and Federated Max-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Federated Max-cap
The main advantage of trading using opposite HUMANA and Federated Max-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Federated Max-cap 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 Max-cap will offset losses from the drop in Federated Max-cap's long position.| HUMANA vs. Cebu Air ADR | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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