Correlation Between HUMANA and SST WT

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

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

Diversification Opportunities for HUMANA and SST WT

0.0

Correlation Coefficient

HUMANA  SST WT

Pay attention - limited upside

The 3 months correlation between HUMANA and SST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and SST WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SST WT 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 SST WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SST WT has no effect on the direction of HUMANA i.e., HUMANA and SST WT go up and down completely randomly.

Pair Corralation between HUMANA and SST WT

If you would invest  8,133  in HUMANA INC on October 21, 2024 and sell it today you would earn a total of  53.00  from holding HUMANA INC or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

HUMANA INC  vs.  SST WT

HUMANA INC

Risk-Adjusted Performance

1 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 1 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

SST WT

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days SST WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SST WT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HUMANA and SST WT

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

The idea behind HUMANA INC and SST WT 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.