Correlation Between Young Cos and Humana
Can any of the company-specific risk be diversified away by investing in both Young Cos and Humana at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Young Cos and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Humana Inc, you can compare the effects of market volatilities on Young Cos and Humana 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 Young Cos with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Humana.
Diversification Opportunities for Young Cos and Humana
Good diversification
The 3 months correlation between Young and Humana is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Young Cos 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 Young Cos Brewery are associated (or correlated) with Humana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humana Inc has no effect on the direction of Young Cos i.e., Young Cos and Humana go up and down completely randomly.
Pair Corralation between Young Cos and Humana
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.4 times more return on investment than Humana. However, Young Cos Brewery is 2.51 times less risky than Humana. It trades about 0.15 of its potential returns per unit of risk. Humana Inc is currently generating about -0.25 per unit of risk. If you would invest 56,600 in Young Cos Brewery on November 29, 2024 and sell it today you would earn a total of 2,000 from holding Young Cos Brewery or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Young Cos Brewery vs. Humana Inc
Performance |
| Timeline |
| Young Cos Brewery |
| Humana Inc |
Young Cos and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Humana
The main advantage of trading using opposite Young Cos and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos position performs unexpectedly, Humana 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 Humana will offset losses from the drop in Humana's long position.| Young Cos vs. Delta Air Lines | Young Cos vs. Alaska Air Group | Young Cos vs. Schroders Investment Trusts | Young Cos vs. Lowland Investment Co |
| Humana vs. Cellnex Telecom SA | Humana vs. Zegona Communications Plc | Humana vs. Alliance Data Systems | Humana vs. Telecom Italia SpA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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