Correlation Between Electromed and Humana
Can any of the company-specific risk be diversified away by investing in both Electromed 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 Electromed and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Humana Inc, you can compare the effects of market volatilities on Electromed 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 Electromed with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Humana.
Diversification Opportunities for Electromed and Humana
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electromed and Humana is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Electromed 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 Electromed 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 Electromed i.e., Electromed and Humana go up and down completely randomly.
Pair Corralation between Electromed and Humana
Given the investment horizon of 90 days Electromed is expected to generate 0.99 times more return on investment than Humana. However, Electromed is 1.01 times less risky than Humana. It trades about 0.38 of its potential returns per unit of risk. Humana Inc is currently generating about 0.21 per unit of risk. If you would invest 2,324 in Electromed on August 26, 2024 and sell it today you would earn a total of 655.00 from holding Electromed or generate 28.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Humana Inc
Performance |
| Timeline |
| Electromed |
| Humana Inc |
Electromed and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Humana
The main advantage of trading using opposite Electromed and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed 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.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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