Correlation Between Usio and HUMANA

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

Diversification Opportunities for Usio and HUMANA

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Usio and HUMANA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Usio 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 Usio Inc 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 Usio i.e., Usio and HUMANA go up and down completely randomly.

Pair Corralation between Usio and HUMANA

Given the investment horizon of 90 days Usio Inc is expected to generate 2.95 times more return on investment than HUMANA. However, Usio is 2.95 times more volatile than HUMANA INC. It trades about 0.03 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.18 per unit of risk. If you would invest  144.00  in Usio Inc on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Usio Inc or generate 2.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

Usio Inc  vs.  HUMANA INC

 Performance 
       Timeline  
Usio Inc 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Usio Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
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.

Usio and HUMANA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Usio and HUMANA

The main advantage of trading using opposite Usio and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio 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 Usio Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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