Correlation Between Oasis Hotel and HUMANA

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

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

Diversification Opportunities for Oasis Hotel and HUMANA

0.0

Correlation Coefficient

Oasis Hotel  HUMANA

Pay attention - limited upside

The 3 months correlation between Oasis and HUMANA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oasis Hotel Resort and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Oasis Hotel 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 Oasis Hotel Resort 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 Oasis Hotel i.e., Oasis Hotel and HUMANA go up and down completely randomly.

Pair Corralation between Oasis Hotel and HUMANA

Given the investment horizon of 90 days Oasis Hotel Resort is expected to under-perform the HUMANA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Oasis Hotel Resort is 22.37 times less risky than HUMANA. The pink sheet trades about -0.04 of its potential returns per unit of risk. The HUMANA INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7,862  in HUMANA INC on September 20, 2024 and sell it today you would lose (167.00) from holding HUMANA INC or give up 2.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.34%
Values	Daily Returns

Oasis Hotel Resort  vs.  HUMANA INC

Oasis Hotel Resort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oasis Hotel Resort has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Oasis Hotel is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

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 unsteady 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 Oasis Hotel and HUMANA

The main advantage of trading using opposite Oasis Hotel and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oasis Hotel 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 Oasis Hotel Resort 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.