Correlation Between HUMANA and Oppenheimer Intl

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

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

Diversification Opportunities for HUMANA and Oppenheimer Intl

0.57

Correlation Coefficient

HUMANA  Oppenheimer Intl

Very weak diversification

The 3 months correlation between HUMANA and Oppenheimer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Oppenheimer Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Intl Small 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 Oppenheimer Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Intl Small has no effect on the direction of HUMANA i.e., HUMANA and Oppenheimer Intl go up and down completely randomly.

Pair Corralation between HUMANA and Oppenheimer Intl

Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.79 times more return on investment than Oppenheimer Intl. However, HUMANA INC is 1.26 times less risky than Oppenheimer Intl. It trades about -0.09 of its potential returns per unit of risk. Oppenheimer Intl Small is currently generating about -0.1 per unit of risk. If you would invest  8,325  in HUMANA INC on September 3, 2024 and sell it today you would lose (290.00) from holding HUMANA INC or give up 3.48% of portfolio value over 90 days.

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

HUMANA INC  vs.  Oppenheimer Intl Small

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 somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Intl Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Intl Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Oppenheimer Intl 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 Oppenheimer Intl

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

The idea behind HUMANA INC and Oppenheimer Intl Small 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.