Correlation Between HUMANA and Badger Infrastructure

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

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

Diversification Opportunities for HUMANA and Badger Infrastructure

-0.28

Correlation Coefficient

HUMANA  Badger Infrastructure

Very good diversification

The 3 months correlation between HUMANA and Badger is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure and HUMANA 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 HUMANA INC are associated (or correlated) with Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of HUMANA i.e., HUMANA and Badger Infrastructure go up and down completely randomly.

Pair Corralation between HUMANA and Badger Infrastructure

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Badger Infrastructure. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 3.83 times less risky than Badger Infrastructure. The bond trades about -0.11 of its potential returns per unit of risk. The Badger Infrastructure Solutions is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,641  in Badger Infrastructure Solutions on September 5, 2024 and sell it today you would earn a total of  71.00  from holding Badger Infrastructure Solutions or generate 2.69% return on investment over 90 days.

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

HUMANA INC  vs.  Badger Infrastructure Solution

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 somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Badger Infrastructure

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Badger Infrastructure Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Badger Infrastructure is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HUMANA and Badger Infrastructure

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

The idea behind HUMANA INC and Badger Infrastructure Solutions 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.