Correlation Between Humana and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Humana and KraneShares MSCI 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 MSCI 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 MSCI One, you can compare the effects of market volatilities on Humana and KraneShares MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and KraneShares MSCI.
Diversification Opportunities for Humana and KraneShares MSCI
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Humana and KraneShares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and KraneShares MSCI One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI One 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI One has no effect on the direction of Humana i.e., Humana and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Humana and KraneShares MSCI
Considering the 90-day investment horizon Humana Inc is expected to generate 1.97 times more return on investment than KraneShares MSCI. However, Humana is 1.97 times more volatile than KraneShares MSCI One. It trades about -0.02 of its potential returns per unit of risk. KraneShares MSCI One is currently generating about -0.05 per unit of risk. If you would invest 31,674 in Humana Inc on August 30, 2024 and sell it today you would lose (2,006) from holding Humana Inc or give up 6.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. KraneShares MSCI One
Performance |
| Timeline |
| Humana Inc |
| KraneShares MSCI One |
Humana and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and KraneShares MSCI
The main advantage of trading using opposite Humana and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, KraneShares MSCI 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 MSCI will offset losses from the drop in KraneShares MSCI'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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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