Correlation Between Humana and Concentra Group
Can any of the company-specific risk be diversified away by investing in both Humana and Concentra Group 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 Concentra Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Concentra Group Holdings, you can compare the effects of market volatilities on Humana and Concentra Group 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 Concentra Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Concentra Group.
Diversification Opportunities for Humana and Concentra Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Humana and Concentra is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Concentra Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentra Group Holdings 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 Concentra Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentra Group Holdings has no effect on the direction of Humana i.e., Humana and Concentra Group go up and down completely randomly.
Pair Corralation between Humana and Concentra Group
Considering the 90-day investment horizon Humana is expected to generate 1.73 times less return on investment than Concentra Group. But when comparing it to its historical volatility, Humana Inc is 1.14 times less risky than Concentra Group. It trades about 0.04 of its potential returns per unit of risk. Concentra Group Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,961 in Concentra Group Holdings on September 12, 2024 and sell it today you would earn a total of 44.50 from holding Concentra Group Holdings or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Concentra Group Holdings
Performance |
| Timeline |
| Humana Inc |
| Concentra Group Holdings |
Humana and Concentra Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Concentra Group
The main advantage of trading using opposite Humana and Concentra Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Concentra Group 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 Concentra Group will offset losses from the drop in Concentra Group's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Concentra Group vs. Encompass Health Corp | Concentra Group vs. Pennant Group | Concentra Group vs. Acadia Healthcare | Concentra Group vs. Select Medical Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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