Correlation Between HUMANA and Quadratic Interest

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

Diversification Opportunities for HUMANA and Quadratic Interest

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between HUMANA and Quadratic is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Quadratic Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadratic Interest Rate 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 Quadratic Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadratic Interest Rate has no effect on the direction of HUMANA i.e., HUMANA and Quadratic Interest go up and down completely randomly.

Pair Corralation between HUMANA and Quadratic Interest

Assuming the 90 days trading horizon HUMANA INC is expected to generate 76.32 times more return on investment than Quadratic Interest. However, HUMANA is 76.32 times more volatile than Quadratic Interest Rate. It trades about 0.07 of its potential returns per unit of risk. Quadratic Interest Rate is currently generating about -0.04 per unit of risk. If you would invest  8,429  in HUMANA INC on December 30, 2023 and sell it today you would lose (333.00) from holding HUMANA INC or give up 3.95% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy91.09%
ValuesDaily Returns

HUMANA INC  vs.  Quadratic Interest Rate

 Performance 
       Timeline  
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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.
Quadratic Interest Rate 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Quadratic Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

HUMANA and Quadratic Interest Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and Quadratic Interest

The main advantage of trading using opposite HUMANA and Quadratic Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Quadratic Interest 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 Quadratic Interest will offset losses from the drop in Quadratic Interest's long position.
The idea behind HUMANA INC and Quadratic Interest Rate 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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