Correlation Between HUMANA and United Utilities
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By analyzing existing cross correlation between HUMANA INC and United Utilities Group, you can compare the effects of market volatilities on HUMANA and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and United Utilities.
Diversification Opportunities for HUMANA and United Utilities
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and United is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of HUMANA i.e., HUMANA and United Utilities go up and down completely randomly.
Pair Corralation between HUMANA and United Utilities
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the United Utilities. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.54 times less risky than United Utilities. The bond trades about -0.09 of its potential returns per unit of risk. The United Utilities Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,286 in United Utilities Group on September 3, 2024 and sell it today you would earn a total of 108.00 from holding United Utilities Group or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
HUMANA INC vs. United Utilities Group
Performance |
| Timeline |
| HUMANA INC |
| United Utilities |
HUMANA and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and United Utilities
The main advantage of trading using opposite HUMANA and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| HUMANA vs. JetBlue Airways Corp | HUMANA vs. Air Transport Services | HUMANA vs. Sun Life Financial | HUMANA vs. Bank of America |
| United Utilities vs. Artesian Resources | United Utilities vs. Global Water Resources | United Utilities vs. Essential Utilities | United Utilities vs. American Water Works |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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