Correlation Between SDI Properties and Humana

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

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

Diversification Opportunities for SDI Properties and Humana

0.6

Correlation Coefficient

SDI Properties  Humana

Poor diversification

The 3 months correlation between SDI and Humana is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SDI Properties Fundo and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and SDI Properties 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 SDI Properties Fundo 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 SDI Properties i.e., SDI Properties and Humana go up and down completely randomly.

Pair Corralation between SDI Properties and Humana

Assuming the 90 days trading horizon SDI Properties Fundo is expected to generate 0.45 times more return on investment than Humana. However, SDI Properties Fundo is 2.22 times less risky than Humana. It trades about 0.01 of its potential returns per unit of risk. Humana Inc is currently generating about -0.16 per unit of risk. If you would invest  8,195  in SDI Properties Fundo on April 24, 2025 and sell it today you would earn a total of  30.00  from holding SDI Properties Fundo or generate 0.37% return on investment over 90 days.

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

SDI Properties Fundo  vs.  Humana Inc

SDI Properties Fundo

Risk-Adjusted Performance

Very Weak

Over the last 90 days SDI Properties Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, SDI Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SDI Properties and Humana

The main advantage of trading using opposite SDI Properties and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SDI Properties 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 SDI Properties Fundo 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.