Correlation Between HUMANA and Astra International

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

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

Diversification Opportunities for HUMANA and Astra International

0.14

Correlation Coefficient

HUMANA  Astra International

Average diversification

The 3 months correlation between HUMANA and Astra is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of HUMANA i.e., HUMANA and Astra International go up and down completely randomly.

Pair Corralation between HUMANA and Astra International

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Astra International. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.67 times less risky than Astra International. The bond trades about -0.18 of its potential returns per unit of risk. The Astra International Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  639.00  in Astra International Tbk on September 12, 2024 and sell it today you would earn a total of  9.00  from holding Astra International Tbk or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

HUMANA INC  vs.  Astra International Tbk

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 weak 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.

Astra International Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astra International Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Astra International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and Astra International

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

The idea behind HUMANA INC and Astra International Tbk 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.