Correlation Between Humana and Direxion Shares
Can any of the company-specific risk be diversified away by investing in both Humana and Direxion Shares 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 Direxion Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Direxion Shares ETF, you can compare the effects of market volatilities on Humana and Direxion Shares 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 Direxion Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Direxion Shares.
Diversification Opportunities for Humana and Direxion Shares
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Direxion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Direxion Shares ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Shares ETF 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 Direxion Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Shares ETF has no effect on the direction of Humana i.e., Humana and Direxion Shares go up and down completely randomly.
Pair Corralation between Humana and Direxion Shares
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Direxion Shares. But the etf apears to be less risky and, when comparing its historical volatility, Humana Inc is 1.24 times less risky than Direxion Shares. The etf trades about -0.05 of its potential returns per unit of risk. The Direxion Shares ETF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,963 in Direxion Shares ETF on September 1, 2024 and sell it today you would earn a total of 1,305 from holding Direxion Shares ETF or generate 44.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Humana Inc vs. Direxion Shares ETF
Performance |
| Timeline |
| Humana Inc |
| Direxion Shares ETF |
Humana and Direxion Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Direxion Shares
The main advantage of trading using opposite Humana and Direxion Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Direxion Shares 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 Direxion Shares will offset losses from the drop in Direxion Shares' long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Direxion Shares vs. FT Vest Equity | Direxion Shares vs. Northern Lights | Direxion Shares vs. Dimensional International High | Direxion Shares vs. Matthews China Discovery |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |