Correlation Between Citizens Bancorp and HUMANA

Can any of the company-specific risk be diversified away by investing in both Citizens Bancorp 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 Citizens Bancorp and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Bancorp Investment and HUMANA INC, you can compare the effects of market volatilities on Citizens Bancorp 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 Citizens Bancorp with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancorp and HUMANA.

Diversification Opportunities for Citizens Bancorp and HUMANA

-0.21

Correlation Coefficient

Citizens Bancorp  HUMANA

Very good diversification

The 3 months correlation between Citizens and HUMANA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Citizens Bancorp 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 Citizens Bancorp Investment 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 Citizens Bancorp i.e., Citizens Bancorp and HUMANA go up and down completely randomly.

Pair Corralation between Citizens Bancorp and HUMANA

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to under-perform the HUMANA. In addition to that, Citizens Bancorp is 2.53 times more volatile than HUMANA INC. It trades about -0.04 of its total potential returns per unit of risk. HUMANA INC is currently generating about -0.04 per unit of volatility. If you would invest  8,172  in HUMANA INC on September 13, 2024 and sell it today you would lose (477.00) from holding HUMANA INC or give up 5.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.18%
Values	Daily Returns

Citizens Bancorp Investment  vs.  HUMANA INC

Citizens Bancorp Inv

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Citizens Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Pair Trading with Citizens Bancorp and HUMANA

The main advantage of trading using opposite Citizens Bancorp and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancorp 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.

The idea behind Citizens Bancorp Investment and HUMANA INC 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.

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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 Directory module to find actively traded commodities issued by global exchanges.