Correlation Between HUMANA and Sherritt International
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By analyzing existing cross correlation between HUMANA INC and Sherritt International, you can compare the effects of market volatilities on HUMANA and Sherritt International 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 Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Sherritt International.
Diversification Opportunities for HUMANA and Sherritt International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HUMANA and Sherritt is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International 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 Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of HUMANA i.e., HUMANA and Sherritt International go up and down completely randomly.
Pair Corralation between HUMANA and Sherritt International
Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.52 times more return on investment than Sherritt International. However, HUMANA INC is 1.91 times less risky than Sherritt International. It trades about -0.18 of its potential returns per unit of risk. Sherritt International is currently generating about -0.32 per unit of risk. If you would invest 8,036 in HUMANA INC on September 2, 2024 and sell it today you would lose (341.00) from holding HUMANA INC or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. Sherritt International
Performance |
| Timeline |
| HUMANA INC |
| Sherritt International |
HUMANA and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Sherritt International
The main advantage of trading using opposite HUMANA and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.The idea behind HUMANA INC and Sherritt International 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.| Sherritt International vs. Metals X Limited | Sherritt International vs. Interra Copper Corp | Sherritt International vs. Anglo American PLC | Sherritt International vs. OM Holdings Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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