Correlation Between CreditRiskMonitorCom and HUMANA

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

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

Diversification Opportunities for CreditRiskMonitorCom and HUMANA

-0.35

Correlation Coefficient

CreditRiskMonitorCom  HUMANA

Very good diversification

The 3 months correlation between CreditRiskMonitorCom and HUMANA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CreditRiskMonitorCom and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and CreditRiskMonitorCom 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 CreditRiskMonitorCom 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 CreditRiskMonitorCom i.e., CreditRiskMonitorCom and HUMANA go up and down completely randomly.

Pair Corralation between CreditRiskMonitorCom and HUMANA

Given the investment horizon of 90 days CreditRiskMonitorCom is expected to generate 4.39 times more return on investment than HUMANA. However, CreditRiskMonitorCom is 4.39 times more volatile than HUMANA INC. It trades about 0.17 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.19 per unit of risk. If you would invest  235.00  in CreditRiskMonitorCom on September 20, 2024 and sell it today you would earn a total of  91.00  from holding CreditRiskMonitorCom or generate 38.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

CreditRiskMonitorCom  vs.  HUMANA INC

CreditRiskMonitorCom

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CreditRiskMonitorCom are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, CreditRiskMonitorCom showed solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady 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 CreditRiskMonitorCom and HUMANA

The main advantage of trading using opposite CreditRiskMonitorCom and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CreditRiskMonitorCom 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 CreditRiskMonitorCom 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..