Correlation Between Humana and FT Cboe
Can any of the company-specific risk be diversified away by investing in both Humana and FT Cboe 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 FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and FT Cboe Vest, you can compare the effects of market volatilities on Humana and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and FT Cboe.
Diversification Opportunities for Humana and FT Cboe
Average diversification
The 3 months correlation between Humana and IGLD is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Humana i.e., Humana and FT Cboe go up and down completely randomly.
Pair Corralation between Humana and FT Cboe
Considering the 90-day investment horizon Humana Inc is expected to generate 3.13 times more return on investment than FT Cboe. However, Humana is 3.13 times more volatile than FT Cboe Vest. It trades about 0.28 of its potential returns per unit of risk. FT Cboe Vest is currently generating about 0.3 per unit of risk. If you would invest 26,247 in Humana Inc on November 4, 2024 and sell it today you would earn a total of 3,076 from holding Humana Inc or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Humana Inc vs. FT Cboe Vest
Performance |
| Timeline |
| Humana Inc |
| FT Cboe Vest |
Humana and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and FT Cboe
The main advantage of trading using opposite Humana and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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