Correlation Between JPMorgan Active and Humana
Can any of the company-specific risk be diversified away by investing in both JPMorgan Active 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 JPMorgan Active and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Active Value and Humana Inc, you can compare the effects of market volatilities on JPMorgan Active 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 JPMorgan Active with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Active and Humana.
Diversification Opportunities for JPMorgan Active and Humana
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and Humana is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Active Value and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and JPMorgan Active 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 JPMorgan Active Value 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 JPMorgan Active i.e., JPMorgan Active and Humana go up and down completely randomly.
Pair Corralation between JPMorgan Active and Humana
Given the investment horizon of 90 days JPMorgan Active is expected to generate 2.64 times less return on investment than Humana. But when comparing it to its historical volatility, JPMorgan Active Value is 3.11 times less risky than Humana. It trades about 0.33 of its potential returns per unit of risk. Humana Inc is currently generating about 0.28 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 | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
JPMorgan Active Value vs. Humana Inc
Performance |
| Timeline |
| JPMorgan Active Value |
| Humana Inc |
JPMorgan Active and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Active and Humana
The main advantage of trading using opposite JPMorgan Active and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Active 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.| JPMorgan Active vs. Global X Funds | JPMorgan Active vs. Dell Technologies | JPMorgan Active vs. Juniper Networks |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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