Correlation Between Humana and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Humana and IShares 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 IShares 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 iShares MSCI World, you can compare the effects of market volatilities on Humana and IShares 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and IShares MSCI.
Diversification Opportunities for Humana and IShares MSCI
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI World has no effect on the direction of Humana i.e., Humana and IShares MSCI go up and down completely randomly.
Pair Corralation between Humana and IShares MSCI
Considering the 90-day investment horizon Humana Inc is expected to under-perform the IShares MSCI. In addition to that, Humana is 2.7 times more volatile than iShares MSCI World. It trades about -0.04 of its total potential returns per unit of risk. iShares MSCI World is currently generating about 0.1 per unit of volatility. If you would invest 10,864 in iShares MSCI World on August 27, 2024 and sell it today you would earn a total of 5,062 from holding iShares MSCI World or generate 46.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. iShares MSCI World
Performance |
| Timeline |
| Humana Inc |
| iShares MSCI World |
Humana and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and IShares MSCI
The main advantage of trading using opposite Humana and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. BMO Long Federal | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. Vanguard Total Market |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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