Correlation Between HUMANA and Monarch Cement
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By analyzing existing cross correlation between HUMANA INC and The Monarch Cement, you can compare the effects of market volatilities on HUMANA and Monarch Cement 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 Monarch Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Monarch Cement.
Diversification Opportunities for HUMANA and Monarch Cement
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Monarch is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and The Monarch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Cement 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 Monarch Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Cement has no effect on the direction of HUMANA i.e., HUMANA and Monarch Cement go up and down completely randomly.
Pair Corralation between HUMANA and Monarch Cement
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Monarch Cement. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.6 times less risky than Monarch Cement. The bond trades about -0.18 of its potential returns per unit of risk. The The Monarch Cement is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 19,400 in The Monarch Cement on September 2, 2024 and sell it today you would earn a total of 2,450 from holding The Monarch Cement or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. The Monarch Cement
Performance |
| Timeline |
| HUMANA INC |
| Monarch Cement |
HUMANA and Monarch Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Monarch Cement
The main advantage of trading using opposite HUMANA and Monarch Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Monarch Cement 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 Monarch Cement will offset losses from the drop in Monarch Cement's long position.The idea behind HUMANA INC and The Monarch Cement 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.| Monarch Cement vs. South32 Limited | Monarch Cement vs. NioCorp Developments Ltd | Monarch Cement vs. HUMANA INC | Monarch Cement vs. SCOR PK |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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