Correlation Between HUMANA and Broad Capital

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

By analyzing existing cross correlation between HUMANA INC and Broad Capital Acquisition, you can compare the effects of market volatilities on HUMANA and Broad Capital 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 Broad Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Broad Capital.

Diversification Opportunities for HUMANA and Broad Capital

0.34

Correlation Coefficient

HUMANA  Broad Capital

Weak diversification

The 3 months correlation between HUMANA and Broad is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Broad Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broad Capital Acquisition 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 Broad Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broad Capital Acquisition has no effect on the direction of HUMANA i.e., HUMANA and Broad Capital go up and down completely randomly.

Pair Corralation between HUMANA and Broad Capital

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Broad Capital. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 284.85 times less risky than Broad Capital. The bond trades about -0.15 of its potential returns per unit of risk. The Broad Capital Acquisition is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Broad Capital Acquisition on September 2, 2024 and sell it today you would earn a total of  12.00  from holding Broad Capital Acquisition or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	30.16%
Values	Daily Returns

HUMANA INC  vs.  Broad Capital Acquisition

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 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.

Broad Capital Acquisition

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Broad Capital Acquisition are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Broad Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HUMANA and Broad Capital

The main advantage of trading using opposite HUMANA and Broad Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Broad Capital 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 Broad Capital will offset losses from the drop in Broad Capital's long position.

The idea behind HUMANA INC and Broad Capital Acquisition 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.