Correlation Between HUMANA and Strategic Asset

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

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

Diversification Opportunities for HUMANA and Strategic Asset

-0.66

Correlation Coefficient

HUMANA  Strategic Asset

Excellent diversification

The 3 months correlation between HUMANA and Strategic is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of HUMANA i.e., HUMANA and Strategic Asset go up and down completely randomly.

Pair Corralation between HUMANA and Strategic Asset

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Strategic Asset. In addition to that, HUMANA is 1.3 times more volatile than Strategic Asset Management. It trades about -0.15 of its total potential returns per unit of risk. Strategic Asset Management is currently generating about 0.17 per unit of volatility. If you would invest  2,316  in Strategic Asset Management on August 31, 2024 and sell it today you would earn a total of  158.00  from holding Strategic Asset Management or generate 6.82% 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.  Strategic Asset Management

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.

Strategic Asset Mana

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Asset Management are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Strategic Asset may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with HUMANA and Strategic Asset

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

The idea behind HUMANA INC and Strategic Asset Management 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.