Correlation Between HUMANA and Nine Mile

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

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

Diversification Opportunities for HUMANA and Nine Mile

-0.51

Correlation Coefficient

HUMANA  Nine Mile

Excellent diversification

The 3 months correlation between HUMANA and Nine is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Nine Mile Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Mile Metals 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 Nine Mile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Mile Metals has no effect on the direction of HUMANA i.e., HUMANA and Nine Mile go up and down completely randomly.

Pair Corralation between HUMANA and Nine Mile

Assuming the 90 days trading horizon HUMANA is expected to generate 3.4 times less return on investment than Nine Mile. But when comparing it to its historical volatility, HUMANA INC is 13.28 times less risky than Nine Mile. It trades about 0.05 of its potential returns per unit of risk. Nine Mile Metals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1.72  in Nine Mile Metals on December 30, 2024 and sell it today you would lose (0.34) from holding Nine Mile Metals or give up 19.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

HUMANA INC  vs.  Nine Mile Metals

HUMANA INC

Risk-Adjusted Performance

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.

Nine Mile Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Mile Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nine Mile may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with HUMANA and Nine Mile

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

The idea behind HUMANA INC and Nine Mile Metals 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.