Correlation Between Humana and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both Humana and SPDR Kensho 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 SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and SPDR Kensho Intelligent, you can compare the effects of market volatilities on Humana and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and SPDR Kensho.
Diversification Opportunities for Humana and SPDR Kensho
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and SPDR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and SPDR Kensho Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Intelligent 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 SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Intelligent has no effect on the direction of Humana i.e., Humana and SPDR Kensho go up and down completely randomly.
Pair Corralation between Humana and SPDR Kensho
Considering the 90-day investment horizon Humana Inc is expected to under-perform the SPDR Kensho. In addition to that, Humana is 3.45 times more volatile than SPDR Kensho Intelligent. It trades about -0.01 of its total potential returns per unit of risk. SPDR Kensho Intelligent is currently generating about 0.19 per unit of volatility. If you would invest 3,390 in SPDR Kensho Intelligent on August 26, 2024 and sell it today you would earn a total of 301.00 from holding SPDR Kensho Intelligent or generate 8.88% 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. SPDR Kensho Intelligent
Performance |
| Timeline |
| Humana Inc |
| SPDR Kensho Intelligent |
Humana and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and SPDR Kensho
The main advantage of trading using opposite Humana and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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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