Correlation Between HUMANA and State Street
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By analyzing existing cross correlation between HUMANA INC and State Street Target, you can compare the effects of market volatilities on HUMANA and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and State Street.
Diversification Opportunities for HUMANA and State Street
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and State is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of HUMANA i.e., HUMANA and State Street go up and down completely randomly.
Pair Corralation between HUMANA and State Street
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the State Street. In addition to that, HUMANA is 4.42 times more volatile than State Street Target. It trades about -0.19 of its total potential returns per unit of risk. State Street Target is currently generating about 0.08 per unit of volatility. If you would invest 1,152 in State Street Target on September 12, 2024 and sell it today you would earn a total of 5.00 from holding State Street Target or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUMANA INC vs. State Street Target
Performance |
| Timeline |
| HUMANA INC |
| State Street Target |
HUMANA and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and State Street
The main advantage of trading using opposite HUMANA and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.The idea behind HUMANA INC and State Street Target 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.| State Street vs. Jpmorgan Smartretirement Income | State Street vs. HUMANA INC | State Street vs. Barloworld Ltd ADR | State Street vs. Morningstar Unconstrained Allocation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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