Correlation Between HUMANA and Chautauqua International

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

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

Diversification Opportunities for HUMANA and Chautauqua International

-0.38

Correlation Coefficient

HUMANA  Chautauqua International

Very good diversification

The 3 months correlation between HUMANA and Chautauqua is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Chautauqua International Growt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chautauqua International 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 Chautauqua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chautauqua International has no effect on the direction of HUMANA i.e., HUMANA and Chautauqua International go up and down completely randomly.

Pair Corralation between HUMANA and Chautauqua International

Assuming the 90 days trading horizon HUMANA INC is expected to generate 97.71 times more return on investment than Chautauqua International. However, HUMANA is 97.71 times more volatile than Chautauqua International Growth. It trades about 0.08 of its potential returns per unit of risk. Chautauqua International Growth is currently generating about 0.05 per unit of risk. If you would invest  7,917  in HUMANA INC on August 31, 2024 and sell it today you would lose (222.00) from holding HUMANA INC or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.32%
Values	Daily Returns

HUMANA INC  vs.  Chautauqua International Growt

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 unsteady 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.

Chautauqua International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chautauqua International Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chautauqua International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and Chautauqua International

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

The idea behind HUMANA INC and Chautauqua International Growth 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.