Correlation Between Humana and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Humana and Invesco SP 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 Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Invesco SP 500, you can compare the effects of market volatilities on Humana and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Invesco SP.
Diversification Opportunities for Humana and Invesco SP
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Invesco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of Humana i.e., Humana and Invesco SP go up and down completely randomly.
Pair Corralation between Humana and Invesco SP
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Invesco SP. In addition to that, Humana is 2.66 times more volatile than Invesco SP 500. It trades about -0.06 of its total potential returns per unit of risk. Invesco SP 500 is currently generating about 0.09 per unit of volatility. If you would invest 9,310 in Invesco SP 500 on September 4, 2024 and sell it today you would earn a total of 1,942 from holding Invesco SP 500 or generate 20.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Humana Inc vs. Invesco SP 500
Performance |
| Timeline |
| Humana Inc |
| Invesco SP 500 |
Humana and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Invesco SP
The main advantage of trading using opposite Humana and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Invesco SP vs. iShares Russell Top | Invesco SP vs. Oppenheimer Russell 1000 | Invesco SP vs. Invesco SP MidCap | Invesco SP vs. Invesco SP 500 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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