Correlation Between Humana and Arrow ETF
Can any of the company-specific risk be diversified away by investing in both Humana and Arrow 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 Arrow 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 Arrow ETF Trust, you can compare the effects of market volatilities on Humana and Arrow 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 Arrow ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Arrow ETF.
Diversification Opportunities for Humana and Arrow ETF
Very good diversification
The 3 months correlation between Humana and Arrow is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Arrow ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow 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 Arrow ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow ETF Trust has no effect on the direction of Humana i.e., Humana and Arrow ETF go up and down completely randomly.
Pair Corralation between Humana and Arrow ETF
Considering the 90-day investment horizon Humana Inc is expected to generate 8.67 times more return on investment than Arrow ETF. However, Humana is 8.67 times more volatile than Arrow ETF Trust. It trades about 0.23 of its potential returns per unit of risk. Arrow ETF Trust is currently generating about 0.17 per unit of risk. If you would invest 25,783 in Humana Inc on September 1, 2024 and sell it today you would earn a total of 3,855 from holding Humana Inc or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Arrow ETF Trust
Performance |
| Timeline |
| Humana Inc |
| Arrow ETF Trust |
Humana and Arrow ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Arrow ETF
The main advantage of trading using opposite Humana and Arrow ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Arrow 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 Arrow ETF will offset losses from the drop in Arrow ETF's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Arrow ETF vs. iShares Morningstar Multi Asset | Arrow ETF vs. Amplify High Income | Arrow ETF vs. First Trust Multi Asset | Arrow ETF vs. SPDR SSgA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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