Correlation Between Humana and Merrill Lynch
Can any of the company-specific risk be diversified away by investing in both Humana and Merrill Lynch 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 Merrill Lynch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Merrill Lynch, you can compare the effects of market volatilities on Humana and Merrill Lynch 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 Merrill Lynch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Merrill Lynch.
Diversification Opportunities for Humana and Merrill Lynch
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Merrill is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Merrill Lynch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrill Lynch 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 Merrill Lynch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrill Lynch has no effect on the direction of Humana i.e., Humana and Merrill Lynch go up and down completely randomly.
Pair Corralation between Humana and Merrill Lynch
If you would invest (100.00) in Merrill Lynch on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Merrill Lynch or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Humana Inc vs. Merrill Lynch
Performance |
| Timeline |
| Humana Inc |
| Merrill Lynch |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Humana and Merrill Lynch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Merrill Lynch
The main advantage of trading using opposite Humana and Merrill Lynch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Merrill Lynch 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 Merrill Lynch will offset losses from the drop in Merrill Lynch's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Merrill Lynch vs. Blackrock Muniholdings Ny | Merrill Lynch vs. MFS Investment Grade | Merrill Lynch vs. Eaton Vance National | Merrill Lynch vs. Invesco High Income |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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