Correlation Between HUMANA and Hennessy Large
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By analyzing existing cross correlation between HUMANA INC and Hennessy Large Cap, you can compare the effects of market volatilities on HUMANA and Hennessy Large 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 Hennessy Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Hennessy Large.
Diversification Opportunities for HUMANA and Hennessy Large
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Hennessy is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Hennessy Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Large 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 Hennessy Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Large Cap has no effect on the direction of HUMANA i.e., HUMANA and Hennessy Large go up and down completely randomly.
Pair Corralation between HUMANA and Hennessy Large
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Hennessy Large. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.97 times less risky than Hennessy Large. The bond trades about -0.16 of its potential returns per unit of risk. The Hennessy Large Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,631 in Hennessy Large Cap on August 29, 2024 and sell it today you would earn a total of 566.00 from holding Hennessy Large Cap or generate 21.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.02% |
| Values | Daily Returns |
HUMANA INC vs. Hennessy Large Cap
Performance |
| Timeline |
| HUMANA INC |
| Hennessy Large Cap |
HUMANA and Hennessy Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Hennessy Large
The main advantage of trading using opposite HUMANA and Hennessy Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Hennessy Large 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 Hennessy Large will offset losses from the drop in Hennessy Large's long position.The idea behind HUMANA INC and Hennessy Large Cap 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.| Hennessy Large vs. T Rowe Price | Hennessy Large vs. Davis Financial Fund | Hennessy Large vs. HUMANA INC | Hennessy Large vs. Aquagold International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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