Correlation Between HUMANA and Volvo AB
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By analyzing existing cross correlation between HUMANA INC and Volvo AB ADR, you can compare the effects of market volatilities on HUMANA and Volvo AB 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 Volvo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Volvo AB.
Diversification Opportunities for HUMANA and Volvo AB
Average diversification
The 3 months correlation between HUMANA and Volvo is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Volvo AB ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volvo AB 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 Volvo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volvo AB ADR has no effect on the direction of HUMANA i.e., HUMANA and Volvo AB go up and down completely randomly.
Pair Corralation between HUMANA and Volvo AB
Assuming the 90 days trading horizon HUMANA is expected to generate 4.13 times less return on investment than Volvo AB. But when comparing it to its historical volatility, HUMANA INC is 2.87 times less risky than Volvo AB. It trades about 0.04 of its potential returns per unit of risk. Volvo AB ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,952 in Volvo AB ADR on September 4, 2024 and sell it today you would earn a total of 563.00 from holding Volvo AB ADR or generate 28.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.24% |
| Values | Daily Returns |
HUMANA INC vs. Volvo AB ADR
Performance |
| Timeline |
| HUMANA INC |
| Volvo AB ADR |
HUMANA and Volvo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Volvo AB
The main advantage of trading using opposite HUMANA and Volvo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Volvo AB 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 Volvo AB will offset losses from the drop in Volvo AB's long position.| HUMANA vs. Usio Inc | HUMANA vs. MACOM Technology Solutions | HUMANA vs. Amkor Technology | HUMANA vs. Analog Devices |
| Volvo AB vs. TOMI Environmental Solutions | Volvo AB vs. SCOR PK | Volvo AB vs. HUMANA INC | Volvo AB 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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