Correlation Between IShares Trust and Humana
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 IShares Trust and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Humana Inc, you can compare the effects of market volatilities on IShares Trust 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 IShares Trust with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Humana.
Diversification Opportunities for IShares Trust and Humana
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Humana is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and IShares Trust 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 iShares Trust 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 IShares Trust i.e., IShares Trust and Humana go up and down completely randomly.
Pair Corralation between IShares Trust and Humana
Given the investment horizon of 90 days IShares Trust is expected to generate 4.23 times less return on investment than Humana. But when comparing it to its historical volatility, iShares Trust is 6.21 times less risky than Humana. It trades about 0.33 of its potential returns per unit of risk. Humana Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 25,555 in Humana Inc on September 4, 2024 and sell it today you would earn a total of 3,758 from holding Humana Inc or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. Humana Inc
Performance |
| Timeline |
| iShares Trust |
| Humana Inc |
IShares Trust and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Humana
The main advantage of trading using opposite IShares Trust and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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.| IShares Trust vs. First Trust Multi Asset | IShares Trust vs. Collaborative Investment Series | IShares Trust vs. EA Series Trust | IShares Trust vs. Ocean Park International |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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