Correlation Between Humana and WisdomTree MidCap
Can any of the company-specific risk be diversified away by investing in both Humana and WisdomTree MidCap 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 WisdomTree MidCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and WisdomTree MidCap Earnings, you can compare the effects of market volatilities on Humana and WisdomTree MidCap 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 WisdomTree MidCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and WisdomTree MidCap.
Diversification Opportunities for Humana and WisdomTree MidCap
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Humana and WisdomTree is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and WisdomTree MidCap Earnings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree MidCap 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 WisdomTree MidCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree MidCap has no effect on the direction of Humana i.e., Humana and WisdomTree MidCap go up and down completely randomly.
Pair Corralation between Humana and WisdomTree MidCap
Considering the 90-day investment horizon Humana Inc is expected to generate 2.51 times more return on investment than WisdomTree MidCap. However, Humana is 2.51 times more volatile than WisdomTree MidCap Earnings. It trades about 0.08 of its potential returns per unit of risk. WisdomTree MidCap Earnings is currently generating about 0.06 per unit of risk. If you would invest 26,018 in Humana Inc on October 26, 2024 and sell it today you would earn a total of 3,362 from holding Humana Inc or generate 12.92% 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. WisdomTree MidCap Earnings
Performance |
| Timeline |
| Humana Inc |
| WisdomTree MidCap |
Humana and WisdomTree MidCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and WisdomTree MidCap
The main advantage of trading using opposite Humana and WisdomTree MidCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, WisdomTree MidCap 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 WisdomTree MidCap will offset losses from the drop in WisdomTree MidCap's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| WisdomTree MidCap vs. WisdomTree SmallCap Earnings | WisdomTree MidCap vs. WisdomTree Earnings 500 | WisdomTree MidCap vs. WisdomTree MidCap Dividend | WisdomTree MidCap vs. NXG NextGen Infrastructure |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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