Correlation Between SK GROWTH and HUMANA

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

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

Diversification Opportunities for SK GROWTH and HUMANA

0.13

Correlation Coefficient

SK GROWTH  HUMANA

Average diversification

The 3 months correlation between SKGRU and HUMANA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SK GROWTH OPPORTUNITIES and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and SK GROWTH 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 SK GROWTH OPPORTUNITIES 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 SK GROWTH i.e., SK GROWTH and HUMANA go up and down completely randomly.

Pair Corralation between SK GROWTH and HUMANA

Assuming the 90 days horizon SK GROWTH OPPORTUNITIES is expected to generate 0.05 times more return on investment than HUMANA. However, SK GROWTH OPPORTUNITIES is 18.67 times less risky than HUMANA. It trades about -0.5 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.19 per unit of risk. If you would invest  1,143  in SK GROWTH OPPORTUNITIES on September 14, 2024 and sell it today you would lose (1.00) from holding SK GROWTH OPPORTUNITIES or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	6.56%
Values	Daily Returns

SK GROWTH OPPORTUNITIES  vs.  HUMANA INC

SK GROWTH OPPORTUNITIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SK GROWTH OPPORTUNITIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SK GROWTH is not utilizing all of its potentials. The current 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. Despite latest inconsistent 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 SK GROWTH and HUMANA

The main advantage of trading using opposite SK GROWTH and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK GROWTH 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 SK GROWTH OPPORTUNITIES 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.