Correlation Between HUMANA and Harbor Health
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By analyzing existing cross correlation between HUMANA INC and Harbor Health Care, you can compare the effects of market volatilities on HUMANA and Harbor Health 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 Harbor Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Harbor Health.
Diversification Opportunities for HUMANA and Harbor Health
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HUMANA and Harbor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Harbor Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Health Care 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 Harbor Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Health Care has no effect on the direction of HUMANA i.e., HUMANA and Harbor Health go up and down completely randomly.
Pair Corralation between HUMANA and Harbor Health
Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.95 times more return on investment than Harbor Health. However, HUMANA INC is 1.06 times less risky than Harbor Health. It trades about 0.2 of its potential returns per unit of risk. Harbor Health Care is currently generating about -0.06 per unit of risk. If you would invest 7,926 in HUMANA INC on March 22, 2024 and sell it today you would earn a total of 256.00 from holding HUMANA INC or generate 3.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
HUMANA INC vs. Harbor Health Care
Performance |
Timeline |
HUMANA INC |
Harbor Health Care |
HUMANA and Harbor Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HUMANA and Harbor Health
The main advantage of trading using opposite HUMANA and Harbor Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Harbor Health 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 Harbor Health will offset losses from the drop in Harbor Health's long position.The idea behind HUMANA INC and Harbor Health Care 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.Harbor Health vs. Vanguard Total Stock | Harbor Health vs. SPDR SP 500 | Harbor Health vs. iShares Core SP | Harbor Health vs. Vanguard Total Bond |
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 CEOs Directory module to screen CEOs from public companies around the world.
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