Correlation Between Humana and IShares Convertible
Can any of the company-specific risk be diversified away by investing in both Humana and IShares Convertible 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 IShares Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and iShares Convertible Bond, you can compare the effects of market volatilities on Humana and IShares Convertible 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 IShares Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and IShares Convertible.
Diversification Opportunities for Humana and IShares Convertible
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and IShares is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and iShares Convertible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Convertible Bond 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 IShares Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Convertible Bond has no effect on the direction of Humana i.e., Humana and IShares Convertible go up and down completely randomly.
Pair Corralation between Humana and IShares Convertible
Considering the 90-day investment horizon Humana Inc is expected to under-perform the IShares Convertible. In addition to that, Humana is 3.92 times more volatile than iShares Convertible Bond. It trades about -0.04 of its total potential returns per unit of risk. iShares Convertible Bond is currently generating about 0.1 per unit of volatility. If you would invest 6,794 in iShares Convertible Bond on August 30, 2024 and sell it today you would earn a total of 2,113 from holding iShares Convertible Bond or generate 31.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. iShares Convertible Bond
Performance |
| Timeline |
| Humana Inc |
| iShares Convertible Bond |
Humana and IShares Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and IShares Convertible
The main advantage of trading using opposite Humana and IShares Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, IShares Convertible 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 IShares Convertible will offset losses from the drop in IShares Convertible's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| IShares Convertible vs. VanEck Vectors Moodys | IShares Convertible vs. BondBloxx ETF Trust | IShares Convertible vs. Vanguard ESG Corporate | IShares Convertible vs. Vanguard Intermediate Term Corporate |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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