Correlation Between Humana and VanEck ChiNext
Can any of the company-specific risk be diversified away by investing in both Humana and VanEck ChiNext 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 VanEck ChiNext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and VanEck ChiNext ETF, you can compare the effects of market volatilities on Humana and VanEck ChiNext 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 VanEck ChiNext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and VanEck ChiNext.
Diversification Opportunities for Humana and VanEck ChiNext
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Humana and VanEck is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and VanEck ChiNext ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ChiNext ETF 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 VanEck ChiNext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ChiNext ETF has no effect on the direction of Humana i.e., Humana and VanEck ChiNext go up and down completely randomly.
Pair Corralation between Humana and VanEck ChiNext
Considering the 90-day investment horizon Humana Inc is expected to generate 0.84 times more return on investment than VanEck ChiNext. However, Humana Inc is 1.2 times less risky than VanEck ChiNext. It trades about 0.22 of its potential returns per unit of risk. VanEck ChiNext ETF is currently generating about 0.01 per unit of risk. If you would invest 25,858 in Humana Inc on August 25, 2024 and sell it today you would earn a total of 3,953 from holding Humana Inc or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. VanEck ChiNext ETF
Performance |
| Timeline |
| Humana Inc |
| VanEck ChiNext ETF |
Humana and VanEck ChiNext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and VanEck ChiNext
The main advantage of trading using opposite Humana and VanEck ChiNext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, VanEck ChiNext 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 VanEck ChiNext will offset losses from the drop in VanEck ChiNext's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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