Correlation Between HUMANA and The Hartford
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By analyzing existing cross correlation between HUMANA INC and The Hartford Balanced, you can compare the effects of market volatilities on HUMANA and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and The Hartford.
Diversification Opportunities for HUMANA and The Hartford
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and The is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Balanced has no effect on the direction of HUMANA i.e., HUMANA and The Hartford go up and down completely randomly.
Pair Corralation between HUMANA and The Hartford
Assuming the 90 days trading horizon HUMANA is expected to generate 3.99 times less return on investment than The Hartford. In addition to that, HUMANA is 1.64 times more volatile than The Hartford Balanced. It trades about 0.02 of its total potential returns per unit of risk. The Hartford Balanced is currently generating about 0.16 per unit of volatility. If you would invest 1,431 in The Hartford Balanced on August 29, 2024 and sell it today you would earn a total of 104.00 from holding The Hartford Balanced or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
HUMANA INC vs. The Hartford Balanced
Performance |
| Timeline |
| HUMANA INC |
| Hartford Balanced |
HUMANA and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and The Hartford
The main advantage of trading using opposite HUMANA and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.The idea behind HUMANA INC and The Hartford Balanced 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.| The Hartford vs. Vanguard Wellesley Income | The Hartford vs. HUMANA INC | The Hartford vs. Aquagold International | The Hartford vs. Barloworld Ltd ADR |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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