Correlation Between HUMANA and New Germany
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By analyzing existing cross correlation between HUMANA INC and New Germany Closed, you can compare the effects of market volatilities on HUMANA and New Germany 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 New Germany. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and New Germany.
Diversification Opportunities for HUMANA and New Germany
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HUMANA and New is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and New Germany Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Germany Closed 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 New Germany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Germany Closed has no effect on the direction of HUMANA i.e., HUMANA and New Germany go up and down completely randomly.
Pair Corralation between HUMANA and New Germany
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the New Germany. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.21 times less risky than New Germany. The bond trades about -0.15 of its potential returns per unit of risk. The New Germany Closed is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 849.00 in New Germany Closed on September 2, 2024 and sell it today you would lose (36.00) from holding New Germany Closed or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
HUMANA INC vs. New Germany Closed
Performance |
| Timeline |
| HUMANA INC |
| New Germany Closed |
HUMANA and New Germany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and New Germany
The main advantage of trading using opposite HUMANA and New Germany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, New Germany 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 New Germany will offset losses from the drop in New Germany's long position.The idea behind HUMANA INC and New Germany Closed 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.| New Germany vs. Mexico Closed | New Germany vs. NXG NextGen Infrastructure | New Germany vs. Taiwan Closed | New Germany vs. Japan Smaller Capitalization |
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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