Correlation Between Humana and Xtrackers
Can any of the company-specific risk be diversified away by investing in both Humana and Xtrackers 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 Xtrackers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Xtrackers 0 1 Year, you can compare the effects of market volatilities on Humana and Xtrackers 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 Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Xtrackers.
Diversification Opportunities for Humana and Xtrackers
Poor diversification
The 3 months correlation between Humana and Xtrackers is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Xtrackers 0 1 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers 0 1 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers 0 1 has no effect on the direction of Humana i.e., Humana and Xtrackers go up and down completely randomly.
Pair Corralation between Humana and Xtrackers
Considering the 90-day investment horizon Humana Inc is expected to generate 161.49 times more return on investment than Xtrackers. However, Humana is 161.49 times more volatile than Xtrackers 0 1 Year. It trades about 0.17 of its potential returns per unit of risk. Xtrackers 0 1 Year is currently generating about 0.69 per unit of risk. If you would invest 26,632 in Humana Inc on August 31, 2024 and sell it today you would earn a total of 3,036 from holding Humana Inc or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Xtrackers 0 1 Year
Performance |
| Timeline |
| Humana Inc |
| Xtrackers 0 1 |
Humana and Xtrackers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Xtrackers
The main advantage of trading using opposite Humana and Xtrackers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Xtrackers 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 Xtrackers will offset losses from the drop in Xtrackers' long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Xtrackers vs. SPDR Barclays Short | Xtrackers vs. SPDR Portfolio Intermediate | Xtrackers vs. SPDR Barclays Long | Xtrackers vs. SPDR Barclays Intermediate |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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