Correlation Between Amg Gwk and HUMANA

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

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

Diversification Opportunities for Amg Gwk and HUMANA

0.11

Correlation Coefficient

Amg Gwk  HUMANA

Average diversification

The 3 months correlation between Amg and HUMANA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Amg Gwk Small and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Amg Gwk 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 Amg Gwk Small 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 Amg Gwk i.e., Amg Gwk and HUMANA go up and down completely randomly.

Pair Corralation between Amg Gwk and HUMANA

Assuming the 90 days horizon Amg Gwk Small is expected to generate 1.55 times more return on investment than HUMANA. However, Amg Gwk is 1.55 times more volatile than HUMANA INC. It trades about 0.05 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.0 per unit of risk. If you would invest  3,270  in Amg Gwk Small on October 24, 2024 and sell it today you would earn a total of  145.00  from holding Amg Gwk Small or generate 4.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amg Gwk Small  vs.  HUMANA INC

Amg Gwk Small

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Gwk Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Amg Gwk may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HUMANA INC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amg Gwk and HUMANA

The main advantage of trading using opposite Amg Gwk and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Gwk 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 Amg Gwk Small 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.