Correlation Between Aquagold International and HUMANA

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Can any of the company-specific risk be diversified away by investing in both Aquagold International and HUMANA 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 Aquagold International and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and HUMANA INC, you can compare the effects of market volatilities on Aquagold International and HUMANA 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 Aquagold International with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and HUMANA.

Diversification Opportunities for Aquagold International and HUMANA

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Aquagold and HUMANA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Aquagold International 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 Aquagold International are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Aquagold International i.e., Aquagold International and HUMANA go up and down completely randomly.

Pair Corralation between Aquagold International and HUMANA

Given the investment horizon of 90 days Aquagold International is expected to generate 1.88 times less return on investment than HUMANA. But when comparing it to its historical volatility, Aquagold International is 1.6 times less risky than HUMANA. It trades about 0.06 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  8,158  in HUMANA INC on March 27, 2024 and sell it today you would earn a total of  24.00  from holding HUMANA INC or generate 0.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy91.53%
ValuesDaily Returns

Aquagold International  vs.  HUMANA INC

 Performance 
       Timeline  
Aquagold International 

Risk-Adjusted Performance

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Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.
HUMANA INC 

Risk-Adjusted Performance

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Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aquagold International and HUMANA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aquagold International and HUMANA

The main advantage of trading using opposite Aquagold International and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.
The idea behind Aquagold International and HUMANA INC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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