Correlation Between HUMANA and Federated Pennsylvania
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By analyzing existing cross correlation between HUMANA INC and Federated Pennsylvania Municipal, you can compare the effects of market volatilities on HUMANA and Federated Pennsylvania 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 Federated Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Federated Pennsylvania.
Diversification Opportunities for HUMANA and Federated Pennsylvania
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between HUMANA and FEDERATED is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Federated Pennsylvania Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Pennsylvania 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 Federated Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Pennsylvania has no effect on the direction of HUMANA i.e., HUMANA and Federated Pennsylvania go up and down completely randomly.
Pair Corralation between HUMANA and Federated Pennsylvania
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Federated Pennsylvania. In addition to that, HUMANA is 2.68 times more volatile than Federated Pennsylvania Municipal. It trades about -0.09 of its total potential returns per unit of risk. Federated Pennsylvania Municipal is currently generating about 0.06 per unit of volatility. If you would invest 1,005 in Federated Pennsylvania Municipal on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Federated Pennsylvania Municipal or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
HUMANA INC vs. Federated Pennsylvania Municip
Performance |
| Timeline |
| HUMANA INC |
| Federated Pennsylvania |
HUMANA and Federated Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Federated Pennsylvania
The main advantage of trading using opposite HUMANA and Federated Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Federated Pennsylvania 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 Federated Pennsylvania will offset losses from the drop in Federated Pennsylvania's long position.| HUMANA vs. JetBlue Airways Corp | HUMANA vs. Air Transport Services | HUMANA vs. Sun Life Financial | HUMANA vs. Bank of America |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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