Correlation Between Humana and Main International
Can any of the company-specific risk be diversified away by investing in both Humana and Main International 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 Main International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Main International ETF, you can compare the effects of market volatilities on Humana and Main International 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 Main International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Main International.
Diversification Opportunities for Humana and Main International
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Humana and Main is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Main International ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main International ETF 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 Main International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main International ETF has no effect on the direction of Humana i.e., Humana and Main International go up and down completely randomly.
Pair Corralation between Humana and Main International
Considering the 90-day investment horizon Humana Inc is expected to generate 2.4 times more return on investment than Main International. However, Humana is 2.4 times more volatile than Main International ETF. It trades about 0.28 of its potential returns per unit of risk. Main International ETF is currently generating about 0.21 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. Main International ETF
Performance |
| Timeline |
| Humana Inc |
| Main International ETF |
Humana and Main International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Main International
The main advantage of trading using opposite Humana and Main International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Main International 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 Main International will offset losses from the drop in Main International's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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