Correlation Between HUMANA and AlphaMark Actively

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

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

Diversification Opportunities for HUMANA and AlphaMark Actively

-0.06

Correlation Coefficient

HUMANA  AlphaMark Actively

Good diversification

The 3 months correlation between HUMANA and AlphaMark is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and AlphaMark Actively Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaMark Actively 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 AlphaMark Actively. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaMark Actively has no effect on the direction of HUMANA i.e., HUMANA and AlphaMark Actively go up and down completely randomly.

Pair Corralation between HUMANA and AlphaMark Actively

Assuming the 90 days trading horizon HUMANA is expected to generate 1.52 times less return on investment than AlphaMark Actively. But when comparing it to its historical volatility, HUMANA INC is 2.0 times less risky than AlphaMark Actively. It trades about 0.31 of its potential returns per unit of risk. AlphaMark Actively Managed is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,968  in AlphaMark Actively Managed on February 16, 2024 and sell it today you would earn a total of  143.00  from holding AlphaMark Actively Managed or generate 4.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

HUMANA INC  vs.  AlphaMark Actively Managed

HUMANA INC

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AlphaMark Actively

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaMark Actively Managed are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, AlphaMark Actively is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with HUMANA and AlphaMark Actively

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

The idea behind HUMANA INC and AlphaMark Actively Managed 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.