Correlation Between Environmmtl Tectonic and HUMANA

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

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

Diversification Opportunities for Environmmtl Tectonic and HUMANA

-0.06

Correlation Coefficient

Environmmtl Tectonic  HUMANA

Good diversification

The 3 months correlation between Environmmtl and HUMANA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Environmmtl Tectonic and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Environmmtl Tectonic 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 Environmmtl Tectonic 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 Environmmtl Tectonic i.e., Environmmtl Tectonic and HUMANA go up and down completely randomly.

Pair Corralation between Environmmtl Tectonic and HUMANA

Given the investment horizon of 90 days Environmmtl Tectonic is expected to generate 2.18 times more return on investment than HUMANA. However, Environmmtl Tectonic is 2.18 times more volatile than HUMANA INC. It trades about -0.02 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.16 per unit of risk. If you would invest  184.00  in Environmmtl Tectonic on September 13, 2024 and sell it today you would lose (7.00) from holding Environmmtl Tectonic or give up 3.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Environmmtl Tectonic  vs.  HUMANA INC

Environmmtl Tectonic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Environmmtl Tectonic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Environmmtl Tectonic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Environmmtl Tectonic and HUMANA

The main advantage of trading using opposite Environmmtl Tectonic and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Environmmtl Tectonic 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 Environmmtl Tectonic 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.