Correlation Between Hall Of and HUMANA

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

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

Diversification Opportunities for Hall Of and HUMANA

0.17

Correlation Coefficient

Hall Of  HUMANA

Average diversification

The 3 months correlation between Hall and HUMANA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hall of Fame and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Hall Of 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 Hall of Fame 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 Hall Of i.e., Hall Of and HUMANA go up and down completely randomly.

Pair Corralation between Hall Of and HUMANA

Assuming the 90 days horizon Hall of Fame is expected to under-perform the HUMANA. In addition to that, Hall Of is 21.89 times more volatile than HUMANA INC. It trades about 0.0 of its total potential returns per unit of risk. HUMANA INC is currently generating about -0.07 per unit of volatility. If you would invest  8,195  in HUMANA INC on November 29, 2024 and sell it today you would lose (296.00) from holding HUMANA INC or give up 3.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

Hall of Fame  vs.  HUMANA INC

Hall of Fame

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hall of Fame has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hall Of is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HUMANA INC

Risk-Adjusted Performance

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hall Of and HUMANA

The main advantage of trading using opposite Hall Of and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hall Of 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 Hall of Fame 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.