Correlation Between Humana and KraneShares Trust
Can any of the company-specific risk be diversified away by investing in both Humana and KraneShares 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 KraneShares 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 KraneShares Trust , you can compare the effects of market volatilities on Humana and KraneShares 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 KraneShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and KraneShares Trust.
Diversification Opportunities for Humana and KraneShares Trust
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and KraneShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust 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 KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of Humana i.e., Humana and KraneShares Trust go up and down completely randomly.
Pair Corralation between Humana and KraneShares Trust
Considering the 90-day investment horizon Humana Inc is expected to generate 1.96 times more return on investment than KraneShares Trust. However, Humana is 1.96 times more volatile than KraneShares Trust . It trades about 0.21 of its potential returns per unit of risk. KraneShares Trust is currently generating about -0.18 per unit of risk. If you would invest 25,777 in Humana Inc on August 30, 2024 and sell it today you would earn a total of 3,891 from holding Humana Inc or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Humana Inc vs. KraneShares Trust
Performance |
| Timeline |
| Humana Inc |
| KraneShares Trust |
Humana and KraneShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and KraneShares Trust
The main advantage of trading using opposite Humana and KraneShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, KraneShares 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 KraneShares Trust will offset losses from the drop in KraneShares Trust's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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