Correlation Between HUMANA and MSA Safety
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By analyzing existing cross correlation between HUMANA INC and MSA Safety, you can compare the effects of market volatilities on HUMANA and MSA Safety 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 MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and MSA Safety.
Diversification Opportunities for HUMANA and MSA Safety
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HUMANA and MSA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and MSA Safety in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of HUMANA i.e., HUMANA and MSA Safety go up and down completely randomly.
Pair Corralation between HUMANA and MSA Safety
Assuming the 90 days trading horizon HUMANA INC is expected to generate 55.61 times more return on investment than MSA Safety. However, HUMANA is 55.61 times more volatile than MSA Safety. It trades about 0.07 of its potential returns per unit of risk. MSA Safety is currently generating about 0.05 per unit of risk. If you would invest 8,012 in HUMANA INC on September 2, 2024 and sell it today you would lose (317.00) from holding HUMANA INC or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.95% |
| Values | Daily Returns |
HUMANA INC vs. MSA Safety
Performance |
| Timeline |
| HUMANA INC |
| MSA Safety |
HUMANA and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and MSA Safety
The main advantage of trading using opposite HUMANA and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.The idea behind HUMANA INC and MSA Safety 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.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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