Correlation Between Bright Health and Humana
Can any of the company-specific risk be diversified away by investing in both Bright Health 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 Bright Health and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Health Group and Humana Inc, you can compare the effects of market volatilities on Bright Health 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 Bright Health with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Health and Humana.
Diversification Opportunities for Bright Health and Humana
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bright and Humana is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bright Health Group and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Bright Health 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 Bright Health Group 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 Bright Health i.e., Bright Health and Humana go up and down completely randomly.
Pair Corralation between Bright Health and Humana
If you would invest 25,865 in Humana Inc on August 24, 2024 and sell it today you would earn a total of 3,706 from holding Humana Inc or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Bright Health Group vs. Humana Inc
Performance |
| Timeline |
| Bright Health Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Humana Inc |
Bright Health and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Health and Humana
The main advantage of trading using opposite Bright Health and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Health 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.| Bright Health vs. Alignment Healthcare LLC | Bright Health vs. Molina Healthcare | Bright Health vs. Clover Health Investments | Bright Health vs. Centene Corp |
| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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