Correlation Between Humana and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Humana and SPDR 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 SPDR 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 SPDR MSCI Emerging, you can compare the effects of market volatilities on Humana and SPDR 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and SPDR MSCI.
Diversification Opportunities for Humana and SPDR MSCI
Excellent diversification
The 3 months correlation between Humana and SPDR is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and SPDR MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Emerging 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Emerging has no effect on the direction of Humana i.e., Humana and SPDR MSCI go up and down completely randomly.
Pair Corralation between Humana and SPDR MSCI
Considering the 90-day investment horizon Humana Inc is expected to generate 3.64 times more return on investment than SPDR MSCI. However, Humana is 3.64 times more volatile than SPDR MSCI Emerging. It trades about 0.22 of its potential returns per unit of risk. SPDR MSCI Emerging is currently generating about -0.15 per unit of risk. If you would invest 25,858 in Humana Inc on August 25, 2024 and sell it today you would earn a total of 3,953 from holding Humana Inc or generate 15.29% 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 MSCI Emerging
Performance |
| Timeline |
| Humana Inc |
| SPDR MSCI Emerging |
Humana and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and SPDR MSCI
The main advantage of trading using opposite Humana and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, SPDR 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR MSCI World | SPDR MSCI vs. SPDR MSCI USA | SPDR MSCI vs. SPDR MSCI Emerging |
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 CEOs Directory module to screen CEOs from public companies around the world.
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