Correlation Between HUMANA and 4 Less

Can any of the company-specific risk be diversified away by investing in both HUMANA and 4 Less 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 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HUMANA INC and 4 Less Group, you can compare the effects of market volatilities on HUMANA and 4 Less 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 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and 4 Less.

Diversification Opportunities for HUMANA and 4 Less

0.3

Correlation Coefficient

HUMANA  4 Less

Weak diversification

The 3 months correlation between HUMANA and FLES is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group 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 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of HUMANA i.e., HUMANA and 4 Less go up and down completely randomly.

Pair Corralation between HUMANA and 4 Less

Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.04 times more return on investment than 4 Less. However, HUMANA INC is 23.05 times less risky than 4 Less. It trades about -0.18 of its potential returns per unit of risk. 4 Less Group is currently generating about -0.03 per unit of risk. If you would invest  8,427  in HUMANA INC on September 21, 2024 and sell it today you would lose (732.00) from holding HUMANA INC or give up 8.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

HUMANA INC  vs.  4 Less Group

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 uncertain 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.

4 Less Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 4 Less Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental 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 HUMANA and 4 Less

The main advantage of trading using opposite HUMANA and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.

The idea behind HUMANA INC and 4 Less Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.