Correlation Between HUMANA and Smead Value
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By analyzing existing cross correlation between HUMANA INC and Smead Value Fund, you can compare the effects of market volatilities on HUMANA and Smead Value 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 Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Smead Value.
Diversification Opportunities for HUMANA and Smead Value
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and Smead is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund 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 Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of HUMANA i.e., HUMANA and Smead Value go up and down completely randomly.
Pair Corralation between HUMANA and Smead Value
Assuming the 90 days trading horizon HUMANA INC is expected to generate 82.67 times more return on investment than Smead Value. However, HUMANA is 82.67 times more volatile than Smead Value Fund. It trades about 0.07 of its potential returns per unit of risk. Smead Value Fund is currently generating about 0.06 per unit of risk. If you would invest 8,081 in HUMANA INC on August 29, 2024 and sell it today you would lose (46.00) from holding HUMANA INC or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.55% |
| Values | Daily Returns |
HUMANA INC vs. Smead Value Fund
Performance |
| Timeline |
| HUMANA INC |
| Smead Value Fund |
HUMANA and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Smead Value
The main advantage of trading using opposite HUMANA and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.The idea behind HUMANA INC and Smead Value Fund 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.| Smead Value vs. Value Fund Investor | Smead Value vs. HUMANA INC | Smead Value vs. Aquagold International | Smead Value vs. Barloworld Ltd ADR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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