Correlation Between HUMANA and American Beacon
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By analyzing existing cross correlation between HUMANA INC and American Beacon Stephens, you can compare the effects of market volatilities on HUMANA and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and American Beacon.
Diversification Opportunities for HUMANA and American Beacon
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and American is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and American Beacon Stephens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Stephens 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Stephens has no effect on the direction of HUMANA i.e., HUMANA and American Beacon go up and down completely randomly.
Pair Corralation between HUMANA and American Beacon
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the American Beacon. In addition to that, HUMANA is 1.06 times more volatile than American Beacon Stephens. It trades about -0.16 of its total potential returns per unit of risk. American Beacon Stephens is currently generating about 0.32 per unit of volatility. If you would invest 1,256 in American Beacon Stephens on September 1, 2024 and sell it today you would earn a total of 126.00 from holding American Beacon Stephens or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
HUMANA INC vs. American Beacon Stephens
Performance |
| Timeline |
| HUMANA INC |
| American Beacon Stephens |
HUMANA and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and American Beacon
The main advantage of trading using opposite HUMANA and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| HUMANA vs. NI Holdings | HUMANA vs. Naked Wines plc | HUMANA vs. Kinsale Capital Group | HUMANA vs. Diageo PLC ADR |
| American Beacon vs. American Beacon Stephens | American Beacon vs. American Beacon Stephens | American Beacon vs. Alger Small Cap | American Beacon vs. Amg Timessquare Small |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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