Correlation Between Federal National and HUMANA
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By analyzing existing cross correlation between Federal National Mortgage and HUMANA INC, you can compare the effects of market volatilities on Federal National 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 Federal National with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and HUMANA.
Diversification Opportunities for Federal National and HUMANA
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Federal and HUMANA is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Federal National 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 Federal National Mortgage 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 Federal National i.e., Federal National and HUMANA go up and down completely randomly.
Pair Corralation between Federal National and HUMANA
Assuming the 90 days horizon Federal National Mortgage is expected to generate 1.69 times more return on investment than HUMANA. However, Federal National is 1.69 times more volatile than HUMANA INC. It trades about 0.27 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.11 per unit of risk. If you would invest 470.00 in Federal National Mortgage on March 19, 2024 and sell it today you would earn a total of 28.00 from holding Federal National Mortgage or generate 5.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Federal National Mortgage vs. HUMANA INC
Performance |
Timeline |
Federal National Mortgage |
HUMANA INC |
Federal National and HUMANA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federal National and HUMANA
The main advantage of trading using opposite Federal National and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National 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.Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal National Mortgage | Federal National vs. Federal Home Loan |
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Check out your portfolio center.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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