Correlation Between HUMANA and Value Line
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By analyzing existing cross correlation between HUMANA INC and Value Line Small, you can compare the effects of market volatilities on HUMANA and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Value Line.
Diversification Opportunities for HUMANA and Value Line
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Value is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Value Line Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Small 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Small has no effect on the direction of HUMANA i.e., HUMANA and Value Line go up and down completely randomly.
Pair Corralation between HUMANA and Value Line
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Value Line. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.14 times less risky than Value Line. The bond trades about -0.07 of its potential returns per unit of risk. The Value Line Small is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,045 in Value Line Small on August 29, 2024 and sell it today you would earn a total of 400.00 from holding Value Line Small or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
HUMANA INC vs. Value Line Small
Performance |
| Timeline |
| HUMANA INC |
| Value Line Small |
HUMANA and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Value Line
The main advantage of trading using opposite HUMANA and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.The idea behind HUMANA INC and Value Line Small 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.| Value Line vs. Putnam Equity Income | Value Line vs. Putnam Growth Opportunities | Value Line vs. HUMANA INC | Value Line vs. Aquagold International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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