Correlation Between Humana and Advisors Inner
Can any of the company-specific risk be diversified away by investing in both Humana and Advisors Inner 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 Advisors Inner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and The Advisors Inner, you can compare the effects of market volatilities on Humana and Advisors Inner 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 Advisors Inner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Advisors Inner.
Diversification Opportunities for Humana and Advisors Inner
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Advisors is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and The Advisors Inner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisors Inner 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 Advisors Inner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisors Inner has no effect on the direction of Humana i.e., Humana and Advisors Inner go up and down completely randomly.
Pair Corralation between Humana and Advisors Inner
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Advisors Inner. In addition to that, Humana is 12.21 times more volatile than The Advisors Inner. It trades about -0.05 of its total potential returns per unit of risk. The Advisors Inner is currently generating about -0.11 per unit of volatility. If you would invest 2,496 in The Advisors Inner on August 29, 2024 and sell it today you would lose (20.00) from holding The Advisors Inner or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.06% |
| Values | Daily Returns |
Humana Inc vs. The Advisors Inner
Performance |
| Timeline |
| Humana Inc |
| Advisors Inner |
Humana and Advisors Inner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Advisors Inner
The main advantage of trading using opposite Humana and Advisors Inner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Advisors Inner 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 Advisors Inner will offset losses from the drop in Advisors Inner's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Advisors Inner vs. Vanguard Total Stock | Advisors Inner vs. SPDR SP 500 | Advisors Inner vs. iShares Core SP | Advisors Inner vs. Vanguard Total Bond |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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