Correlation Between HUMANA and Tactical Multi-purpose

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

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

Diversification Opportunities for HUMANA and Tactical Multi-purpose

-0.19

Correlation Coefficient

HUMANA  Tactical Multi-purpose

Good diversification

The 3 months correlation between HUMANA and Tactical is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Tactical Multi Purpose Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tactical Multi Purpose 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 Tactical Multi-purpose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tactical Multi Purpose has no effect on the direction of HUMANA i.e., HUMANA and Tactical Multi-purpose go up and down completely randomly.

Pair Corralation between HUMANA and Tactical Multi-purpose

Assuming the 90 days trading horizon HUMANA is expected to generate 1.14 times less return on investment than Tactical Multi-purpose. In addition to that, HUMANA is 24.43 times more volatile than Tactical Multi Purpose Fund. It trades about 0.02 of its total potential returns per unit of risk. Tactical Multi Purpose Fund is currently generating about 0.45 per unit of volatility. If you would invest  983.00  in Tactical Multi Purpose Fund on February 28, 2024 and sell it today you would earn a total of  21.00  from holding Tactical Multi Purpose Fund or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

HUMANA INC  vs.  Tactical Multi Purpose Fund

HUMANA INC

Risk-Adjusted Performance

0 of 100

OK

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.

Tactical Multi Purpose

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Tactical Multi Purpose Fund are ranked lower than 35 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Tactical Multi-purpose is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and Tactical Multi-purpose

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

The idea behind HUMANA INC and Tactical Multi Purpose Fund 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.