Correlation Between HUMANA and Arcimoto

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

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

Diversification Opportunities for HUMANA and Arcimoto

0.14

Correlation Coefficient

HUMANA  Arcimoto

Average diversification

The 3 months correlation between HUMANA and Arcimoto is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Arcimoto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcimoto 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 Arcimoto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcimoto has no effect on the direction of HUMANA i.e., HUMANA and Arcimoto go up and down completely randomly.

Pair Corralation between HUMANA and Arcimoto

Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.68 times more return on investment than Arcimoto. However, HUMANA INC is 1.48 times less risky than Arcimoto. It trades about 0.06 of its potential returns per unit of risk. Arcimoto is currently generating about -0.33 per unit of risk. If you would invest  7,930  in HUMANA INC on February 1, 2024 and sell it today you would earn a total of  166.00  from holding HUMANA INC or generate 2.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

HUMANA INC  vs.  Arcimoto

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 current stock price disturbance, may contribute to short-term losses for the investors.

Arcimoto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcimoto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with HUMANA and Arcimoto

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

The idea behind HUMANA INC and Arcimoto 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.