Correlation Between Empresa Distribuidora and HUMANA

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

By analyzing existing cross correlation between Empresa Distribuidora y and HUMANA INC 395, you can compare the effects of market volatilities on Empresa Distribuidora 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 Empresa Distribuidora with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and HUMANA.

Diversification Opportunities for Empresa Distribuidora and HUMANA

0.0

Correlation Coefficient

Empresa Distribuidora  HUMANA

Pay attention - limited upside

The 3 months correlation between Empresa and HUMANA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and HUMANA INC 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 5 and Empresa Distribuidora 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 Empresa Distribuidora y 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 5 has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and HUMANA go up and down completely randomly.

Pair Corralation between Empresa Distribuidora and HUMANA

If you would invest  2,452  in Empresa Distribuidora y on September 16, 2024 and sell it today you would earn a total of  2,471  from holding Empresa Distribuidora y or generate 100.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Empresa Distribuidora y  vs.  HUMANA INC 395

Empresa Distribuidora

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Empresa Distribuidora y are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Empresa Distribuidora displayed solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC 395 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Empresa Distribuidora and HUMANA

The main advantage of trading using opposite Empresa Distribuidora and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Distribuidora 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 Empresa Distribuidora y and HUMANA INC 395 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.