Correlation Between Retireful and HUMANA

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

Diversification Opportunities for Retireful and HUMANA

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Retireful and HUMANA is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Retireful and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Retireful 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 Retireful 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 Retireful i.e., Retireful and HUMANA go up and down completely randomly.

Pair Corralation between Retireful and HUMANA

If you would invest  2,167  in Retireful on August 13, 2024 and sell it today you would earn a total of  0.00  from holding Retireful or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Retireful  vs.  HUMANA INC

 Performance 
       Timeline  
Retireful 

Risk-Adjusted Performance

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Weak
 
Strong
Solid
Over the last 90 days Retireful has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile technical indicators, Retireful may actually be approaching a critical reversion point that can send shares even higher in December 2024.
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 unsteady 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.

Retireful and HUMANA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Retireful and HUMANA

The main advantage of trading using opposite Retireful and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retireful 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 Retireful 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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