Correlation Between Humana and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Humana and SPDR SP 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 SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and SPDR SP North, you can compare the effects of market volatilities on Humana and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and SPDR SP.
Diversification Opportunities for Humana and SPDR SP
Excellent diversification
The 3 months correlation between Humana and SPDR is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and SPDR SP North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP North 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP North has no effect on the direction of Humana i.e., Humana and SPDR SP go up and down completely randomly.
Pair Corralation between Humana and SPDR SP
Considering the 90-day investment horizon Humana Inc is expected to generate 2.32 times more return on investment than SPDR SP. However, Humana is 2.32 times more volatile than SPDR SP North. It trades about 0.04 of its potential returns per unit of risk. SPDR SP North is currently generating about -0.11 per unit of risk. If you would invest 28,244 in Humana Inc on September 12, 2024 and sell it today you would earn a total of 338.00 from holding Humana Inc or generate 1.2% 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. SPDR SP North
Performance |
| Timeline |
| Humana Inc |
| SPDR SP North |
Humana and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and SPDR SP
The main advantage of trading using opposite Humana and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| SPDR SP vs. SPDR SP Global | SPDR SP vs. FlexShares Morningstar Global | SPDR SP vs. SPDR Russell 1000 | SPDR SP vs. SPDR MSCI EAFE |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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