Correlation Between HUMANA and Consumer Finance
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By analyzing existing cross correlation between HUMANA INC and Consumer Finance Portfolio, you can compare the effects of market volatilities on HUMANA and Consumer Finance 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 Consumer Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Consumer Finance.
Diversification Opportunities for HUMANA and Consumer Finance
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HUMANA and Consumer is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Consumer Finance Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Finance Por 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 Consumer Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Finance Por has no effect on the direction of HUMANA i.e., HUMANA and Consumer Finance go up and down completely randomly.
Pair Corralation between HUMANA and Consumer Finance
Assuming the 90 days trading horizon HUMANA INC is expected to generate 69.89 times more return on investment than Consumer Finance. However, HUMANA is 69.89 times more volatile than Consumer Finance Portfolio. It trades about 0.07 of its potential returns per unit of risk. Consumer Finance Portfolio is currently generating about 0.08 per unit of risk. If you would invest 8,028 in HUMANA INC on August 30, 2024 and sell it today you would lose (333.00) from holding HUMANA INC or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.74% |
| Values | Daily Returns |
HUMANA INC vs. Consumer Finance Portfolio
Performance |
| Timeline |
| HUMANA INC |
| Consumer Finance Por |
HUMANA and Consumer Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Consumer Finance
The main advantage of trading using opposite HUMANA and Consumer Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Consumer Finance 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 Consumer Finance will offset losses from the drop in Consumer Finance's long position.The idea behind HUMANA INC and Consumer Finance Portfolio 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.| Consumer Finance vs. HUMANA INC | Consumer Finance vs. Aquagold International | Consumer Finance vs. Barloworld Ltd ADR | Consumer Finance vs. Morningstar Unconstrained Allocation |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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