Correlation Between HUMANA and Guangdong Investment
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By analyzing existing cross correlation between HUMANA INC and Guangdong Investment Limited, you can compare the effects of market volatilities on HUMANA and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Guangdong Investment.
Diversification Opportunities for HUMANA and Guangdong Investment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Guangdong is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of HUMANA i.e., HUMANA and Guangdong Investment go up and down completely randomly.
Pair Corralation between HUMANA and Guangdong Investment
Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.64 times more return on investment than Guangdong Investment. However, HUMANA INC is 1.56 times less risky than Guangdong Investment. It trades about -0.18 of its potential returns per unit of risk. Guangdong Investment Limited is currently generating about -0.12 per unit of risk. If you would invest 8,036 in HUMANA INC on September 2, 2024 and sell it today you would lose (341.00) from holding HUMANA INC or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. Guangdong Investment Limited
Performance |
| Timeline |
| HUMANA INC |
| Guangdong Investment |
HUMANA and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Guangdong Investment
The main advantage of trading using opposite HUMANA and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.The idea behind HUMANA INC and Guangdong Investment Limited 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.| Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. Anhui Conch Cement | Guangdong Investment vs. Endesa SA ADR | Guangdong Investment vs. HUMANA INC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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