Correlation Between Humana and John Hancock
Can any of the company-specific risk be diversified away by investing in both Humana and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and John Hancock Hedged, you can compare the effects of market volatilities on Humana and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and John Hancock.
Diversification Opportunities for Humana and John Hancock
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Humana and John is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and John Hancock Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Hedged 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Hedged has no effect on the direction of Humana i.e., Humana and John Hancock go up and down completely randomly.
Pair Corralation between Humana and John Hancock
Considering the 90-day investment horizon Humana Inc is expected to generate 1.21 times more return on investment than John Hancock. However, Humana is 1.21 times more volatile than John Hancock Hedged. It trades about -0.04 of its potential returns per unit of risk. John Hancock Hedged is currently generating about -0.19 per unit of risk. If you would invest 25,891 in Humana Inc on January 6, 2025 and sell it today you would lose (514.00) from holding Humana Inc or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. John Hancock Hedged
Performance |
| Timeline |
| Humana Inc |
| John Hancock Hedged |
Humana and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and John Hancock
The main advantage of trading using opposite Humana and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| John Hancock vs. Ellsworth Convertible Growth | John Hancock vs. Delaware Investments Florida | John Hancock vs. RENN Fund | John Hancock vs. Nuveen New Jersey |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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