Correlation Between HUMANA and Somerset Trust
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By analyzing existing cross correlation between HUMANA INC and Somerset Trust Holding, you can compare the effects of market volatilities on HUMANA and Somerset Trust 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 Somerset Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Somerset Trust.
Diversification Opportunities for HUMANA and Somerset Trust
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Somerset is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Somerset Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somerset Trust Holding 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 Somerset Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somerset Trust Holding has no effect on the direction of HUMANA i.e., HUMANA and Somerset Trust go up and down completely randomly.
Pair Corralation between HUMANA and Somerset Trust
Assuming the 90 days trading horizon HUMANA INC is expected to generate 25.83 times more return on investment than Somerset Trust. However, HUMANA is 25.83 times more volatile than Somerset Trust Holding. It trades about 0.07 of its potential returns per unit of risk. Somerset Trust Holding is currently generating about 0.03 per unit of risk. If you would invest 8,074 in HUMANA INC on September 3, 2024 and sell it today you would lose (39.00) from holding HUMANA INC or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.93% |
| Values | Daily Returns |
HUMANA INC vs. Somerset Trust Holding
Performance |
| Timeline |
| HUMANA INC |
| Somerset Trust Holding |
HUMANA and Somerset Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Somerset Trust
The main advantage of trading using opposite HUMANA and Somerset Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Somerset Trust 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 Somerset Trust will offset losses from the drop in Somerset Trust's long position.| HUMANA vs. JetBlue Airways Corp | HUMANA vs. Air Transport Services | HUMANA vs. Sun Life Financial | HUMANA vs. Bank of America |
| Somerset Trust vs. Potomac Bancshares | Somerset Trust vs. Apollo Bancorp | Somerset Trust vs. The Farmers Bank | Somerset Trust vs. 1ST SUMMIT BANCORP |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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