Correlation Between Humana and Bright Health
Can any of the company-specific risk be diversified away by investing in both Humana and Bright Health 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 Bright Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Bright Health Group, you can compare the effects of market volatilities on Humana and Bright Health 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 Bright Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Bright Health.
Diversification Opportunities for Humana and Bright Health
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Humana and Bright is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Bright Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Health Group 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 Bright Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Health Group has no effect on the direction of Humana i.e., Humana and Bright Health go up and down completely randomly.
Pair Corralation between Humana and Bright Health
If you would invest 26,109 in Humana Inc on August 28, 2024 and sell it today you would earn a total of 4,309 from holding Humana Inc or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Humana Inc vs. Bright Health Group
Performance |
| Timeline |
| Humana Inc |
| Bright Health Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Humana and Bright Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Bright Health
The main advantage of trading using opposite Humana and Bright Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Bright Health 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 Bright Health will offset losses from the drop in Bright Health's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Bright Health vs. Alignment Healthcare LLC | Bright Health vs. Molina Healthcare | Bright Health vs. Clover Health Investments | Bright Health vs. Centene 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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