Correlation Between Ardmore Shpng and HUMANA

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

By analyzing existing cross correlation between Ardmore Shpng and HUMANA INC, you can compare the effects of market volatilities on Ardmore Shpng and HUMANA 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 Ardmore Shpng with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardmore Shpng and HUMANA.

Diversification Opportunities for Ardmore Shpng and HUMANA

0.63

Correlation Coefficient

Ardmore Shpng  HUMANA

Poor diversification

The 3 months correlation between Ardmore and HUMANA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ardmore Shpng and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Ardmore Shpng 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 Ardmore Shpng are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Ardmore Shpng i.e., Ardmore Shpng and HUMANA go up and down completely randomly.

Pair Corralation between Ardmore Shpng and HUMANA

Considering the 90-day investment horizon Ardmore Shpng is expected to under-perform the HUMANA. In addition to that, Ardmore Shpng is 2.56 times more volatile than HUMANA INC. It trades about -0.38 of its total potential returns per unit of risk. HUMANA INC is currently generating about -0.15 per unit of volatility. If you would invest  8,311  in HUMANA INC on August 30, 2024 and sell it today you would lose (616.00) from holding HUMANA INC or give up 7.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Ardmore Shpng  vs.  HUMANA INC

Ardmore Shpng

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardmore Shpng has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Pair Trading with Ardmore Shpng and HUMANA

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

The idea behind Ardmore Shpng and HUMANA INC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.