Correlation Between HUMANA and Quantum EMotion

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

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

Diversification Opportunities for HUMANA and Quantum EMotion

-0.14

Correlation Coefficient

HUMANA  Quantum EMotion

Good diversification

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

Pair Corralation between HUMANA and Quantum EMotion

Assuming the 90 days trading horizon HUMANA is expected to generate 137.37 times less return on investment than Quantum EMotion. But when comparing it to its historical volatility, HUMANA INC is 24.67 times less risky than Quantum EMotion. It trades about 0.03 of its potential returns per unit of risk. Quantum eMotion is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3.73  in Quantum eMotion on October 5, 2024 and sell it today you would earn a total of  120.27  from holding Quantum eMotion or generate 3224.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.98%
Values	Daily Returns

HUMANA INC  vs.  Quantum eMotion

HUMANA INC

Risk-Adjusted Performance

4 of 100

Very Weak

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.

Quantum eMotion

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum eMotion are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Quantum EMotion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HUMANA and Quantum EMotion

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

The idea behind HUMANA INC and Quantum eMotion 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.