Correlation Between Main International and Humana
Can any of the company-specific risk be diversified away by investing in both Main International and Humana 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 Main International and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main International ETF and Humana Inc, you can compare the effects of market volatilities on Main International and Humana 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 Main International with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main International and Humana.
Diversification Opportunities for Main International and Humana
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Main and Humana is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Main International 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 Main International ETF are associated (or correlated) with Humana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humana Inc has no effect on the direction of Main International i.e., Main International and Humana go up and down completely randomly.
Pair Corralation between Main International and Humana
Given the investment horizon of 90 days Main International is expected to generate 3.22 times less return on investment than Humana. But when comparing it to its historical volatility, Main International ETF is 2.4 times less risky than Humana. It trades about 0.21 of its potential returns per unit of risk. Humana Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 26,247 in Humana Inc on November 4, 2024 and sell it today you would earn a total of 3,076 from holding Humana Inc or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Main International ETF vs. Humana Inc
Performance |
| Timeline |
| Main International ETF |
| Humana Inc |
Main International and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main International and Humana
The main advantage of trading using opposite Main International and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main International position performs unexpectedly, Humana 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 Humana will offset losses from the drop in Humana's long position.| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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