Correlation Between HUMANA and Jpmorgan Smartretirement
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By analyzing existing cross correlation between HUMANA INC and Jpmorgan Smartretirement Income, you can compare the effects of market volatilities on HUMANA and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Jpmorgan Smartretirement.
Diversification Opportunities for HUMANA and Jpmorgan Smartretirement
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Jpmorgan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Jpmorgan Smartretirement Incom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of HUMANA i.e., HUMANA and Jpmorgan Smartretirement go up and down completely randomly.
Pair Corralation between HUMANA and Jpmorgan Smartretirement
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Jpmorgan Smartretirement. In addition to that, HUMANA is 2.25 times more volatile than Jpmorgan Smartretirement Income. It trades about -0.16 of its total potential returns per unit of risk. Jpmorgan Smartretirement Income is currently generating about -0.04 per unit of volatility. If you would invest 1,633 in Jpmorgan Smartretirement Income on August 29, 2024 and sell it today you would lose (8.00) from holding Jpmorgan Smartretirement Income or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.02% |
| Values | Daily Returns |
HUMANA INC vs. Jpmorgan Smartretirement Incom
Performance |
| Timeline |
| HUMANA INC |
| Jpmorgan Smartretirement |
HUMANA and Jpmorgan Smartretirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Jpmorgan Smartretirement
The main advantage of trading using opposite HUMANA and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Jpmorgan Smartretirement 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 Jpmorgan Smartretirement will offset losses from the drop in Jpmorgan Smartretirement's long position.The idea behind HUMANA INC and Jpmorgan Smartretirement Income 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.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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