Correlation Between Humana and Invesco BulletShares
Can any of the company-specific risk be diversified away by investing in both Humana and Invesco BulletShares 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 Invesco BulletShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Invesco BulletShares 2027, you can compare the effects of market volatilities on Humana and Invesco BulletShares 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 Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Invesco BulletShares.
Diversification Opportunities for Humana and Invesco BulletShares
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and Invesco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Invesco BulletShares 2027 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2027 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 Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2027 has no effect on the direction of Humana i.e., Humana and Invesco BulletShares go up and down completely randomly.
Pair Corralation between Humana and Invesco BulletShares
Considering the 90-day investment horizon Humana Inc is expected to generate 17.37 times more return on investment than Invesco BulletShares. However, Humana is 17.37 times more volatile than Invesco BulletShares 2027. It trades about 0.21 of its potential returns per unit of risk. Invesco BulletShares 2027 is currently generating about 0.32 per unit of risk. If you would invest 26,071 in Humana Inc on September 2, 2024 and sell it today you would earn a total of 3,567 from holding Humana Inc or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Invesco BulletShares 2027
Performance |
| Timeline |
| Humana Inc |
| Invesco BulletShares 2027 |
Humana and Invesco BulletShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Invesco BulletShares
The main advantage of trading using opposite Humana and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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