Correlation Between Humana and SHP ETF
Can any of the company-specific risk be diversified away by investing in both Humana and SHP ETF 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 SHP ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and SHP ETF Trust, you can compare the effects of market volatilities on Humana and SHP ETF 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 SHP ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and SHP ETF.
Diversification Opportunities for Humana and SHP ETF
Excellent diversification
The 3 months correlation between Humana and SHP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and SHP ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHP ETF Trust 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 SHP ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHP ETF Trust has no effect on the direction of Humana i.e., Humana and SHP ETF go up and down completely randomly.
Pair Corralation between Humana and SHP ETF
Considering the 90-day investment horizon Humana Inc is expected to generate 106.07 times more return on investment than SHP ETF. However, Humana is 106.07 times more volatile than SHP ETF Trust. It trades about 0.19 of its potential returns per unit of risk. SHP ETF Trust is currently generating about 0.85 per unit of risk. If you would invest 26,109 in Humana Inc on August 29, 2024 and sell it today you would earn a total of 3,450 from holding Humana Inc or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. SHP ETF Trust
Performance |
| Timeline |
| Humana Inc |
| SHP ETF Trust |
Humana and SHP ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and SHP ETF
The main advantage of trading using opposite Humana and SHP ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, SHP ETF 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 SHP ETF will offset losses from the drop in SHP ETF's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| SHP ETF vs. SHP ETF Trust | SHP ETF vs. SHP ETF Trust | SHP ETF vs. iShares Trust | SHP ETF vs. VanEck ETF Trust |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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