Correlation Between Humana and BlackRock AAA
Can any of the company-specific risk be diversified away by investing in both Humana and BlackRock AAA 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 BlackRock AAA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and BlackRock AAA CLO, you can compare the effects of market volatilities on Humana and BlackRock AAA 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 BlackRock AAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and BlackRock AAA.
Diversification Opportunities for Humana and BlackRock AAA
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and BlackRock is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and BlackRock AAA CLO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock AAA CLO 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 BlackRock AAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock AAA CLO has no effect on the direction of Humana i.e., Humana and BlackRock AAA go up and down completely randomly.
Pair Corralation between Humana and BlackRock AAA
Considering the 90-day investment horizon Humana Inc is expected to generate 53.26 times more return on investment than BlackRock AAA. However, Humana is 53.26 times more volatile than BlackRock AAA CLO. It trades about 0.21 of its potential returns per unit of risk. BlackRock AAA CLO is currently generating about 0.42 per unit of risk. If you would invest 25,777 in Humana Inc on August 30, 2024 and sell it today you would earn a total of 3,891 from holding Humana Inc or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Humana Inc vs. BlackRock AAA CLO
Performance |
| Timeline |
| Humana Inc |
| BlackRock AAA CLO |
Humana and BlackRock AAA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and BlackRock AAA
The main advantage of trading using opposite Humana and BlackRock AAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, BlackRock AAA 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 BlackRock AAA will offset losses from the drop in BlackRock AAA's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| BlackRock AAA vs. Janus Detroit Street | BlackRock AAA vs. Janus Detroit Street | BlackRock AAA vs. VanEck ETF Trust | BlackRock AAA vs. Panagram Bbb B Clo |
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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