Correlation Between HUMANA and Pear Tree
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By analyzing existing cross correlation between HUMANA INC and Pear Tree Polaris, you can compare the effects of market volatilities on HUMANA and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Pear Tree.
Diversification Opportunities for HUMANA and Pear Tree
Very weak diversification
The 3 months correlation between HUMANA and Pear is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of HUMANA i.e., HUMANA and Pear Tree go up and down completely randomly.
Pair Corralation between HUMANA and Pear Tree
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Pear Tree. In addition to that, HUMANA is 1.62 times more volatile than Pear Tree Polaris. It trades about -0.18 of its total potential returns per unit of risk. Pear Tree Polaris is currently generating about -0.04 per unit of volatility. If you would invest 2,380 in Pear Tree Polaris on September 2, 2024 and sell it today you would lose (16.00) from holding Pear Tree Polaris or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. Pear Tree Polaris
Performance |
| Timeline |
| HUMANA INC |
| Pear Tree Polaris |
HUMANA and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Pear Tree
The main advantage of trading using opposite HUMANA and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.The idea behind HUMANA INC and Pear Tree Polaris 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.| Pear Tree vs. Loomis Sayles Growth | Pear Tree vs. Edgewood Growth Fund | Pear Tree vs. Nuance Mid Cap | Pear Tree vs. Parnassus Mid Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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