Correlation Between Humana and US Treasury
Can any of the company-specific risk be diversified away by investing in both Humana and US Treasury 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 US Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and US Treasury 6, you can compare the effects of market volatilities on Humana and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and US Treasury.
Diversification Opportunities for Humana and US Treasury
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Humana and XBIL is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and US Treasury 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 6 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 US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 6 has no effect on the direction of Humana i.e., Humana and US Treasury go up and down completely randomly.
Pair Corralation between Humana and US Treasury
Considering the 90-day investment horizon Humana Inc is expected to under-perform the US Treasury. In addition to that, Humana is 74.94 times more volatile than US Treasury 6. It trades about -0.04 of its total potential returns per unit of risk. US Treasury 6 is currently generating about 0.7 per unit of volatility. If you would invest 4,595 in US Treasury 6 on August 27, 2024 and sell it today you would earn a total of 417.00 from holding US Treasury 6 or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.7% |
| Values | Daily Returns |
Humana Inc vs. US Treasury 6
Performance |
| Timeline |
| Humana Inc |
| US Treasury 6 |
Humana and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and US Treasury
The main advantage of trading using opposite Humana and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| US Treasury vs. Rbb Fund | US Treasury vs. US Treasury 12 | US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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