Correlation Between HUMANA and Legible
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By analyzing existing cross correlation between HUMANA INC and Legible, you can compare the effects of market volatilities on HUMANA and Legible 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 Legible. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Legible.
Diversification Opportunities for HUMANA and Legible
Excellent diversification
The 3 months correlation between HUMANA and Legible is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Legible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legible 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 Legible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legible has no effect on the direction of HUMANA i.e., HUMANA and Legible go up and down completely randomly.
Pair Corralation between HUMANA and Legible
Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.06 times more return on investment than Legible. However, HUMANA INC is 15.67 times less risky than Legible. It trades about -0.18 of its potential returns per unit of risk. Legible is currently generating about -0.01 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 | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
HUMANA INC vs. Legible
Performance |
| Timeline |
| HUMANA INC |
| Legible |
HUMANA and Legible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Legible
The main advantage of trading using opposite HUMANA and Legible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Legible 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 Legible will offset losses from the drop in Legible's long position.The idea behind HUMANA INC and Legible 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.| Legible vs. Slate Office REIT | Legible vs. HUMANA INC | Legible vs. Aquagold International | Legible 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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