Correlation Between HUMANA and SECOM
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By analyzing existing cross correlation between HUMANA INC and SECOM LTD, you can compare the effects of market volatilities on HUMANA and SECOM 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 SECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and SECOM.
Diversification Opportunities for HUMANA and SECOM
Modest diversification
The 3 months correlation between HUMANA and SECOM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and SECOM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECOM LTD 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 SECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECOM LTD has no effect on the direction of HUMANA i.e., HUMANA and SECOM go up and down completely randomly.
Pair Corralation between HUMANA and SECOM
Assuming the 90 days trading horizon HUMANA INC is expected to generate 1.71 times more return on investment than SECOM. However, HUMANA is 1.71 times more volatile than SECOM LTD. It trades about 0.14 of its potential returns per unit of risk. SECOM LTD is currently generating about -0.27 per unit of risk. If you would invest 7,965 in HUMANA INC on January 20, 2024 and sell it today you would earn a total of 447.00 from holding HUMANA INC or generate 5.61% 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. SECOM LTD
Performance |
Timeline |
HUMANA INC |
SECOM LTD |
HUMANA and SECOM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HUMANA and SECOM
The main advantage of trading using opposite HUMANA and SECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, SECOM 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 SECOM will offset losses from the drop in SECOM's long position.HUMANA vs. AEP TEX INC | HUMANA vs. US BANK NATIONAL | HUMANA vs. Trump Media Technology | HUMANA vs. Airship AI Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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