Correlation Between Humana and First Trust
Can any of the company-specific risk be diversified away by investing in both Humana and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and First Trust S Network, you can compare the effects of market volatilities on Humana and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and First Trust.
Diversification Opportunities for Humana and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Humana and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and First Trust S Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust S 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust S has no effect on the direction of Humana i.e., Humana and First Trust go up and down completely randomly.
Pair Corralation between Humana and First Trust
Considering the 90-day investment horizon Humana Inc is expected to under-perform the First Trust. In addition to that, Humana is 2.54 times more volatile than First Trust S Network. It trades about -0.07 of its total potential returns per unit of risk. First Trust S Network is currently generating about 0.15 per unit of volatility. If you would invest 3,129 in First Trust S Network on November 28, 2024 and sell it today you would earn a total of 680.00 from holding First Trust S Network or generate 21.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Humana Inc vs. First Trust S Network
Performance |
| Timeline |
| Humana Inc |
| First Trust S |
Humana and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and First Trust
The main advantage of trading using opposite Humana and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| First Trust vs. Ember Therapeutics | First Trust vs. Leone Asset Management | First Trust vs. Opus Magnum Ameris |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |