Correlation Between Humanica Public and Intermedical Care

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

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

Diversification Opportunities for Humanica Public and Intermedical Care

0.91

Correlation Coefficient

Humanica Public  Intermedical Care

Almost no diversification

The 3 months correlation between Humanica and Intermedical is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Humanica Public and Intermedical Care and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedical Care and Humanica Public 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 Humanica Public are associated (or correlated) with Intermedical Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedical Care has no effect on the direction of Humanica Public i.e., Humanica Public and Intermedical Care go up and down completely randomly.

Pair Corralation between Humanica Public and Intermedical Care

Assuming the 90 days trading horizon Humanica Public is expected to under-perform the Intermedical Care. In addition to that, Humanica Public is 1.92 times more volatile than Intermedical Care and. It trades about -0.28 of its total potential returns per unit of risk. Intermedical Care and is currently generating about -0.19 per unit of volatility. If you would invest  530.00  in Intermedical Care and on October 6, 2024 and sell it today you would lose (54.00) from holding Intermedical Care and or give up 10.19% of portfolio value over 90 days.

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

Humanica Public  vs.  Intermedical Care and

Humanica Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Humanica Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Intermedical Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intermedical Care and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Humanica Public and Intermedical Care

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

The idea behind Humanica Public and Intermedical Care and 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.