Correlation Between Oscar Health and Humana
Can any of the company-specific risk be diversified away by investing in both Oscar Health 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 Oscar Health and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oscar Health and Humana Inc, you can compare the effects of market volatilities on Oscar Health 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 Oscar Health with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oscar Health and Humana.
Diversification Opportunities for Oscar Health and Humana
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oscar and Humana is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oscar Health and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Oscar Health 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 Oscar Health 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 Oscar Health i.e., Oscar Health and Humana go up and down completely randomly.
Pair Corralation between Oscar Health and Humana
Given the investment horizon of 90 days Oscar Health is expected to under-perform the Humana. In addition to that, Oscar Health is 1.82 times more volatile than Humana Inc. It trades about -0.21 of its total potential returns per unit of risk. Humana Inc is currently generating about -0.26 per unit of volatility. If you would invest 28,263 in Humana Inc on November 18, 2024 and sell it today you would lose (2,880) from holding Humana Inc or give up 10.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oscar Health vs. Humana Inc
Performance |
| Timeline |
| Oscar Health |
| Humana Inc |
Oscar Health and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oscar Health and Humana
The main advantage of trading using opposite Oscar Health and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oscar Health 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.| Oscar Health vs. Molina Healthcare | Oscar Health vs. Centene Corp | Oscar Health vs. Elevance Health | Oscar Health vs. Clover Health Investments |
| 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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