Correlation Between Humana and Enhabit
Can any of the company-specific risk be diversified away by investing in both Humana and Enhabit 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 Enhabit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Enhabit, you can compare the effects of market volatilities on Humana and Enhabit 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 Enhabit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Enhabit.
Diversification Opportunities for Humana and Enhabit
Modest diversification
The 3 months correlation between Humana and Enhabit is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Enhabit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhabit 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 Enhabit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhabit has no effect on the direction of Humana i.e., Humana and Enhabit go up and down completely randomly.
Pair Corralation between Humana and Enhabit
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Enhabit. But the etf apears to be less risky and, when comparing its historical volatility, Humana Inc is 1.04 times less risky than Enhabit. The etf trades about -0.3 of its potential returns per unit of risk. The Enhabit is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 844.00 in Enhabit on November 28, 2024 and sell it today you would lose (20.00) from holding Enhabit or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Enhabit
Performance |
| Timeline |
| Humana Inc |
| Enhabit |
Humana and Enhabit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Enhabit
The main advantage of trading using opposite Humana and Enhabit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Enhabit 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 Enhabit will offset losses from the drop in Enhabit's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Enhabit vs. The Ensign Group | Enhabit vs. Pennant Group | Enhabit vs. InnovAge Holding Corp | Enhabit vs. National HealthCare |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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