Correlation Between International Seaways and HUMANA

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

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

Diversification Opportunities for International Seaways and HUMANA

0.41

Correlation Coefficient

International Seaways  HUMANA

Very weak diversification

The 3 months correlation between International and HUMANA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and International Seaways 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 International Seaways 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 International Seaways i.e., International Seaways and HUMANA go up and down completely randomly.

Pair Corralation between International Seaways and HUMANA

Given the investment horizon of 90 days International Seaways is expected to under-perform the HUMANA. In addition to that, International Seaways is 3.03 times more volatile than HUMANA INC. It trades about -0.17 of its total potential returns per unit of risk. HUMANA INC is currently generating about -0.09 per unit of volatility. If you would invest  8,325  in HUMANA INC on September 3, 2024 and sell it today you would lose (290.00) from holding HUMANA INC or give up 3.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

International Seaways  vs.  HUMANA INC

International Seaways

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Seaways has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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 somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with International Seaways and HUMANA

The main advantage of trading using opposite International Seaways and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways 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 International Seaways 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.