Correlation Between HUMANA and Welsbach Technology
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By analyzing existing cross correlation between HUMANA INC and Welsbach Technology Metals, you can compare the effects of market volatilities on HUMANA and Welsbach Technology 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 Welsbach Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Welsbach Technology.
Diversification Opportunities for HUMANA and Welsbach Technology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and Welsbach is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Welsbach Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welsbach Technology 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 Welsbach Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welsbach Technology has no effect on the direction of HUMANA i.e., HUMANA and Welsbach Technology go up and down completely randomly.
Pair Corralation between HUMANA and Welsbach Technology
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Welsbach Technology. In addition to that, HUMANA is 4.18 times more volatile than Welsbach Technology Metals. It trades about -0.22 of its total potential returns per unit of risk. Welsbach Technology Metals is currently generating about 0.32 per unit of volatility. If you would invest 1,105 in Welsbach Technology Metals on August 30, 2024 and sell it today you would earn a total of 21.00 from holding Welsbach Technology Metals or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
HUMANA INC vs. Welsbach Technology Metals
Performance |
| Timeline |
| HUMANA INC |
| Welsbach Technology |
HUMANA and Welsbach Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Welsbach Technology
The main advantage of trading using opposite HUMANA and Welsbach Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Welsbach Technology 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 Welsbach Technology will offset losses from the drop in Welsbach Technology's long position.The idea behind HUMANA INC and Welsbach Technology Metals 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.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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