Correlation Between HUMANA and Sika AG
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By analyzing existing cross correlation between HUMANA INC and Sika AG ADR, you can compare the effects of market volatilities on HUMANA and Sika AG 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 Sika AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Sika AG.
Diversification Opportunities for HUMANA and Sika AG
Poor diversification
The 3 months correlation between HUMANA and Sika is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Sika AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sika AG ADR 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 Sika AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sika AG ADR has no effect on the direction of HUMANA i.e., HUMANA and Sika AG go up and down completely randomly.
Pair Corralation between HUMANA and Sika AG
Assuming the 90 days trading horizon HUMANA INC is expected to generate 48.35 times more return on investment than Sika AG. However, HUMANA is 48.35 times more volatile than Sika AG ADR. It trades about 0.07 of its potential returns per unit of risk. Sika AG ADR is currently generating about 0.01 per unit of risk. If you would invest 8,028 in HUMANA INC on August 30, 2024 and sell it today you would earn a total of 7.00 from holding HUMANA INC or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.35% |
| Values | Daily Returns |
HUMANA INC vs. Sika AG ADR
Performance |
| Timeline |
| HUMANA INC |
| Sika AG ADR |
HUMANA and Sika AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Sika AG
The main advantage of trading using opposite HUMANA and Sika AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Sika AG 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 Sika AG will offset losses from the drop in Sika AG's long position.| HUMANA vs. Brandywine Realty Trust | HUMANA vs. Celsius Holdings | HUMANA vs. Uber Technologies | HUMANA vs. PepsiCo |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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