Correlation Between HUMANA and One Choice

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Can any of the company-specific risk be diversified away by investing in both HUMANA and One Choice 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 One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUMANA INC and One Choice Portfolio, you can compare the effects of market volatilities on HUMANA and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and One Choice.

Diversification Opportunities for HUMANA and One Choice

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between HUMANA and One is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and One Choice Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice Portfolio 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 One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice Portfolio has no effect on the direction of HUMANA i.e., HUMANA and One Choice go up and down completely randomly.

Pair Corralation between HUMANA and One Choice

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the One Choice. In addition to that, HUMANA is 1.45 times more volatile than One Choice Portfolio. It trades about -0.25 of its total potential returns per unit of risk. One Choice Portfolio is currently generating about 0.11 per unit of volatility. If you would invest  1,997  in One Choice Portfolio on August 28, 2024 and sell it today you would earn a total of  33.00  from holding One Choice Portfolio or generate 1.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

HUMANA INC  vs.  One Choice Portfolio

 Performance 
       Timeline  
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.
One Choice Portfolio 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in One Choice Portfolio are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, One Choice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HUMANA and One Choice Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and One Choice

The main advantage of trading using opposite HUMANA and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.
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The idea behind HUMANA INC and One Choice Portfolio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
One Choice vs. One Choice Portfolio
One Choice vs. One Choice Portfolio
One Choice vs. One Choice Portfolio
One Choice vs. One Choice Portfolio
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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