Correlation Between HUMANA and Strategic Metals
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By analyzing existing cross correlation between HUMANA INC and Strategic Metals, you can compare the effects of market volatilities on HUMANA and Strategic Metals 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 Strategic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Strategic Metals.
Diversification Opportunities for HUMANA and Strategic Metals
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HUMANA and Strategic is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Strategic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Metals 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 Strategic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Metals has no effect on the direction of HUMANA i.e., HUMANA and Strategic Metals go up and down completely randomly.
Pair Corralation between HUMANA and Strategic Metals
Assuming the 90 days trading horizon HUMANA is expected to generate 28.03 times less return on investment than Strategic Metals. But when comparing it to its historical volatility, HUMANA INC is 10.16 times less risky than Strategic Metals. It trades about 0.01 of its potential returns per unit of risk. Strategic Metals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Strategic Metals on September 3, 2024 and sell it today you would lose (1.00) from holding Strategic Metals or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.6% |
| Values | Daily Returns |
HUMANA INC vs. Strategic Metals
Performance |
| Timeline |
| HUMANA INC |
| Strategic Metals |
HUMANA and Strategic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Strategic Metals
The main advantage of trading using opposite HUMANA and Strategic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Strategic Metals 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 Strategic Metals will offset losses from the drop in Strategic Metals' long position.| HUMANA vs. JetBlue Airways Corp | HUMANA vs. Air Transport Services | HUMANA vs. Sun Life Financial | HUMANA vs. Bank of America |
| Strategic Metals vs. Advantage Solutions | Strategic Metals vs. Atlas Corp | Strategic Metals vs. PureCycle Technologies | Strategic Metals vs. WM Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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