Correlation Between Global X and Humana
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Humana Inc, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Humana.
Diversification Opportunities for Global X and Humana
Very good diversification
The 3 months correlation between Global and Humana is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Global X 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 Global X Funds 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 Global X i.e., Global X and Humana go up and down completely randomly.
Pair Corralation between Global X and Humana
Considering the 90-day investment horizon Global X is expected to generate 11.55 times less return on investment than Humana. But when comparing it to its historical volatility, Global X Funds is 1.79 times less risky than Humana. It trades about 0.04 of its potential returns per unit of risk. Humana Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 26,247 in Humana Inc on November 4, 2024 and sell it today you would earn a total of 3,076 from holding Humana Inc or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Global X Funds vs. Humana Inc
Performance |
| Timeline |
| Global X Funds |
| Humana Inc |
Global X and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Humana
The main advantage of trading using opposite Global X and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. iShares Dividend and | Global X vs. Martin Currie Sustainable | Global X vs. VictoryShares THB Mid | Global X vs. Mast Global Battery |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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