Correlation Between HUMANA and MicroAlgo

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

Diversification Opportunities for HUMANA and MicroAlgo

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between HUMANA and MicroAlgo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of HUMANA i.e., HUMANA and MicroAlgo go up and down completely randomly.

Pair Corralation between HUMANA and MicroAlgo

Assuming the 90 days trading horizon HUMANA INC is expected to generate 1.97 times more return on investment than MicroAlgo. However, HUMANA is 1.97 times more volatile than MicroAlgo. It trades about 0.08 of its potential returns per unit of risk. MicroAlgo is currently generating about 0.05 per unit of risk. If you would invest  8,146  in HUMANA INC on December 29, 2023 and sell it today you would lose (266.00) from holding HUMANA INC or give up 3.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy91.01%
ValuesDaily Returns

HUMANA INC  vs.  MicroAlgo

 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.
MicroAlgo 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MicroAlgo are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, MicroAlgo displayed solid returns over the last few months and may actually be approaching a breakup point.

HUMANA and MicroAlgo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and MicroAlgo

The main advantage of trading using opposite HUMANA and MicroAlgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, MicroAlgo 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 MicroAlgo will offset losses from the drop in MicroAlgo's long position.
The idea behind HUMANA INC and MicroAlgo 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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