Correlation Between HUMANA and Iveda Solutions

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

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

Diversification Opportunities for HUMANA and Iveda Solutions

-0.29

Correlation Coefficient

HUMANA  Iveda Solutions

Very good diversification

The 3 months correlation between HUMANA and Iveda is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Iveda Solutions Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions Warrant 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 Iveda Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iveda Solutions Warrant has no effect on the direction of HUMANA i.e., HUMANA and Iveda Solutions go up and down completely randomly.

Pair Corralation between HUMANA and Iveda Solutions

Assuming the 90 days trading horizon HUMANA is expected to generate 248.38 times less return on investment than Iveda Solutions. But when comparing it to its historical volatility, HUMANA INC is 47.15 times less risky than Iveda Solutions. It trades about 0.06 of its potential returns per unit of risk. Iveda Solutions Warrant is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Iveda Solutions Warrant on October 7, 2024 and sell it today you would earn a total of  23.00  from holding Iveda Solutions Warrant or generate 766.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.84%
Values	Daily Returns

HUMANA INC  vs.  Iveda Solutions Warrant

HUMANA INC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 4 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Iveda Solutions Warrant

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Iveda Solutions showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HUMANA and Iveda Solutions

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

The idea behind HUMANA INC and Iveda Solutions Warrant 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.