Correlation Between HUMANA and Strats Trust

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

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

Diversification Opportunities for HUMANA and Strats Trust

-0.62

Correlation Coefficient

HUMANA  Strats Trust

Excellent diversification

The 3 months correlation between HUMANA and Strats is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Strats Trust Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats Trust Cellular 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 Strats Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats Trust Cellular has no effect on the direction of HUMANA i.e., HUMANA and Strats Trust go up and down completely randomly.

Pair Corralation between HUMANA and Strats Trust

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Strats Trust. In addition to that, HUMANA is 1.46 times more volatile than Strats Trust Cellular. It trades about -0.15 of its total potential returns per unit of risk. Strats Trust Cellular is currently generating about 0.14 per unit of volatility. If you would invest  940.00  in Strats Trust Cellular on August 31, 2024 and sell it today you would earn a total of  45.00  from holding Strats Trust Cellular or generate 4.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

HUMANA INC  vs.  Strats Trust Cellular

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.

Strats Trust Cellular

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Strats Trust Cellular are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking indicators, Strats Trust is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with HUMANA and Strats Trust

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

The idea behind HUMANA INC and Strats Trust Cellular 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.