Correlation Between HUMANA and Western Asset
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By analyzing existing cross correlation between HUMANA INC and Western Asset Total, you can compare the effects of market volatilities on HUMANA and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Western Asset.
Diversification Opportunities for HUMANA and Western Asset
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HUMANA and Western is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Total has no effect on the direction of HUMANA i.e., HUMANA and Western Asset go up and down completely randomly.
Pair Corralation between HUMANA and Western Asset
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Western Asset. In addition to that, HUMANA is 2.67 times more volatile than Western Asset Total. It trades about -0.02 of its total potential returns per unit of risk. Western Asset Total is currently generating about 0.09 per unit of volatility. If you would invest 868.00 in Western Asset Total on September 2, 2024 and sell it today you would earn a total of 46.00 from holding Western Asset Total or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
HUMANA INC vs. Western Asset Total
Performance |
| Timeline |
| HUMANA INC |
| Western Asset Total |
HUMANA and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Western Asset
The main advantage of trading using opposite HUMANA and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.The idea behind HUMANA INC and Western Asset Total 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.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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