Correlation Between HUMANA and Adyen NV

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both HUMANA and Adyen NV 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 HUMANA and Adyen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUMANA INC and Adyen NV, you can compare the effects of market volatilities on HUMANA and Adyen NV 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 HUMANA with a short position of Adyen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Adyen NV.

Diversification Opportunities for HUMANA and Adyen NV

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between HUMANA and Adyen is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Adyen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adyen NV and HUMANA 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 HUMANA INC are associated (or correlated) with Adyen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adyen NV has no effect on the direction of HUMANA i.e., HUMANA and Adyen NV go up and down completely randomly.

Pair Corralation between HUMANA and Adyen NV

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Adyen NV. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.44 times less risky than Adyen NV. The bond trades about -0.18 of its potential returns per unit of risk. The Adyen NV is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,443  in Adyen NV on September 12, 2024 and sell it today you would earn a total of  129.00  from holding Adyen NV or generate 8.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.88%
ValuesDaily Returns

HUMANA INC  vs.  Adyen NV

 Performance 
       Timeline  
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak 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.
Adyen NV 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Adyen NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Adyen NV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HUMANA and Adyen NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and Adyen NV

The main advantage of trading using opposite HUMANA and Adyen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Adyen NV 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 Adyen NV will offset losses from the drop in Adyen NV's long position.
The idea behind HUMANA INC and Adyen NV 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.
Check out your portfolio center.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Transaction History
View history of all your transactions and understand their impact on performance
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios