Correlation Between Young Cos and Humana

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

By analyzing existing cross correlation between Young Cos Brewery and Humana Inc, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Humana.

Diversification Opportunities for Young Cos and Humana

-0.17

Correlation Coefficient

Young Cos  Humana

Good diversification

The 3 months correlation between Young and Humana is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Humana go up and down completely randomly.

Pair Corralation between Young Cos and Humana

Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.58 times more return on investment than Humana. However, Young Cos Brewery is 1.74 times less risky than Humana. It trades about -0.08 of its potential returns per unit of risk. Humana Inc is currently generating about -0.07 per unit of risk. If you would invest  63,800  in Young Cos Brewery on November 29, 2024 and sell it today you would lose (5,200) from holding Young Cos Brewery or give up 8.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Young Cos Brewery  vs.  Humana Inc

Young Cos Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Young Cos Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Humana Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Humana Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Young Cos and Humana

The main advantage of trading using opposite Young Cos and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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 Young Cos Brewery 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.

Check out your portfolio center.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.