Correlation Between HUMANA and Fidelity Sai

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

Diversification Opportunities for HUMANA and Fidelity Sai

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between HUMANA and Fidelity is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Fidelity Sai Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Long 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 Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Long has no effect on the direction of HUMANA i.e., HUMANA and Fidelity Sai go up and down completely randomly.

Pair Corralation between HUMANA and Fidelity Sai

Assuming the 90 days trading horizon HUMANA is expected to generate 1.3 times less return on investment than Fidelity Sai. In addition to that, HUMANA is 3.07 times more volatile than Fidelity Sai Long Term. It trades about 0.07 of its total potential returns per unit of risk. Fidelity Sai Long Term is currently generating about 0.27 per unit of volatility. If you would invest  672.00  in Fidelity Sai Long Term on February 24, 2024 and sell it today you would earn a total of  24.00  from holding Fidelity Sai Long Term or generate 3.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

HUMANA INC  vs.  Fidelity Sai Long Term

 Performance 
       Timeline  
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
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 current stock price disturbance, may contribute to short-term losses for the investors.
Fidelity Sai Long 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fidelity Sai Long Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Sai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HUMANA and Fidelity Sai Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and Fidelity Sai

The main advantage of trading using opposite HUMANA and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Fidelity Sai 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 Fidelity Sai will offset losses from the drop in Fidelity Sai's long position.
The idea behind HUMANA INC and Fidelity Sai Long Term 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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