Correlation Between HUMANA and Nippon Steel
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By analyzing existing cross correlation between HUMANA INC and Nippon Steel, you can compare the effects of market volatilities on HUMANA and Nippon Steel 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 Nippon Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Nippon Steel.
Diversification Opportunities for HUMANA and Nippon Steel
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between HUMANA and Nippon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Nippon Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Steel 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 Nippon Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Steel has no effect on the direction of HUMANA i.e., HUMANA and Nippon Steel go up and down completely randomly.
Pair Corralation between HUMANA and Nippon Steel
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Nippon Steel. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.88 times less risky than Nippon Steel. The bond trades about -0.16 of its potential returns per unit of risk. The Nippon Steel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,071 in Nippon Steel on September 20, 2024 and sell it today you would lose (23.00) from holding Nippon Steel or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
HUMANA INC vs. Nippon Steel
Performance |
| Timeline |
| HUMANA INC |
| Nippon Steel |
HUMANA and Nippon Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Nippon Steel
The main advantage of trading using opposite HUMANA and Nippon Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Nippon Steel 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 Nippon Steel will offset losses from the drop in Nippon Steel's long position.| HUMANA vs. Anheuser Busch Inbev | HUMANA vs. Vita Coco | HUMANA vs. Compania Cervecerias Unidas | HUMANA vs. Westinghouse Air Brake |
| Nippon Steel vs. ArcelorMittal SA ADR | Nippon Steel vs. Gerdau SA ADR | Nippon Steel vs. POSCO Holdings | Nippon Steel vs. HUMANA INC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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