Correlation Between Humana and Principal
Can any of the company-specific risk be diversified away by investing in both Humana and Principal 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 Principal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Principal, you can compare the effects of market volatilities on Humana and Principal 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 Principal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Principal.
Diversification Opportunities for Humana and Principal
Very good diversification
The 3 months correlation between Humana and Principal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Principal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal 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 Principal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal has no effect on the direction of Humana i.e., Humana and Principal go up and down completely randomly.
Pair Corralation between Humana and Principal
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Principal. In addition to that, Humana is 1.67 times more volatile than Principal. It trades about -0.04 of its total potential returns per unit of risk. Principal is currently generating about 0.04 per unit of volatility. If you would invest 2,268 in Principal on September 4, 2024 and sell it today you would earn a total of 175.00 from holding Principal or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.71% |
| Values | Daily Returns |
Humana Inc vs. Principal
Performance |
| Timeline |
| Humana Inc |
| Principal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Humana and Principal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Principal
The main advantage of trading using opposite Humana and Principal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Principal 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 Principal will offset losses from the drop in Principal's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Principal vs. Invesco DWA Emerging | Principal vs. SCOR PK | Principal vs. HUMANA INC | Principal vs. Aquagold International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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