Correlation Between Humana and Global X
Can any of the company-specific risk be diversified away by investing in both Humana and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Global X Preferred, you can compare the effects of market volatilities on Humana and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Global X.
Diversification Opportunities for Humana and Global X
Excellent diversification
The 3 months correlation between Humana and Global is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Global X Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Preferred 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Preferred has no effect on the direction of Humana i.e., Humana and Global X go up and down completely randomly.
Pair Corralation between Humana and Global X
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Global X. In addition to that, Humana is 4.63 times more volatile than Global X Preferred. It trades about -0.03 of its total potential returns per unit of risk. Global X Preferred is currently generating about 0.06 per unit of volatility. If you would invest 1,913 in Global X Preferred on August 25, 2024 and sell it today you would earn a total of 122.00 from holding Global X Preferred or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Global X Preferred
Performance |
| Timeline |
| Humana Inc |
| Global X Preferred |
Humana and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Global X
The main advantage of trading using opposite Humana and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Global X vs. ETF Series Solutions | Global X vs. Aquagold International | Global X vs. Morningstar Unconstrained Allocation | Global X vs. High Yield Municipal Fund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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