Correlation Between Us Energy and HUMANA

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Can any of the company-specific risk be diversified away by investing in both Us Energy and HUMANA 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 Us Energy and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Energy Initiative and HUMANA INC, you can compare the effects of market volatilities on Us Energy and HUMANA 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 Us Energy with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Energy and HUMANA.

Diversification Opportunities for Us Energy and HUMANA

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Us Energy and HUMANA

If you would invest  0.00  in Us Energy Initiative on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Us Energy Initiative or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Us Energy Initiative  vs.  HUMANA INC

 Performance 
       Timeline  
Us Energy Initiative 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Us Energy Initiative has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Us Energy is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.
HUMANA INC 

Risk-Adjusted Performance

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Weak
 
Strong
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.

Us Energy and HUMANA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Us Energy and HUMANA

The main advantage of trading using opposite Us Energy and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Energy position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.
The idea behind Us Energy Initiative and HUMANA INC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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