Correlation Between Panther Metals and Humana

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

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

Diversification Opportunities for Panther Metals and Humana

0.52

Correlation Coefficient

Panther Metals  Humana

Very weak diversification

The 3 months correlation between Panther and Humana is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Panther Metals 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 Panther Metals PLC 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 Panther Metals i.e., Panther Metals and Humana go up and down completely randomly.

Pair Corralation between Panther Metals and Humana

Assuming the 90 days trading horizon Panther Metals is expected to generate 1.25 times less return on investment than Humana. In addition to that, Panther Metals is 1.9 times more volatile than Humana Inc. It trades about 0.1 of its total potential returns per unit of risk. Humana Inc is currently generating about 0.24 per unit of volatility. If you would invest  25,466  in Humana Inc on September 4, 2024 and sell it today you would earn a total of  3,995  from holding Humana Inc or generate 15.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Panther Metals PLC  vs.  Humana Inc

Panther Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panther Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Panther Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private 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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Panther Metals and Humana

The main advantage of trading using opposite Panther Metals and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals 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 Panther Metals PLC 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.