Correlation Between HUMANA and Ximen Mining

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

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

Diversification Opportunities for HUMANA and Ximen Mining

0.41

Correlation Coefficient

HUMANA  Ximen Mining

Very weak diversification

The 3 months correlation between HUMANA and Ximen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Ximen Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ximen Mining Corp 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 Ximen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ximen Mining Corp has no effect on the direction of HUMANA i.e., HUMANA and Ximen Mining go up and down completely randomly.

Pair Corralation between HUMANA and Ximen Mining

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Ximen Mining. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 8.47 times less risky than Ximen Mining. The bond trades about -0.18 of its potential returns per unit of risk. The Ximen Mining Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Ximen Mining Corp on September 12, 2024 and sell it today you would lose (1.50) from holding Ximen Mining Corp or give up 18.75% of portfolio value over 90 days.

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

HUMANA INC  vs.  Ximen Mining Corp

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.

Ximen Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ximen Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with HUMANA and Ximen Mining

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

The idea behind HUMANA INC and Ximen Mining Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.