Correlation Between HUMANA and First Trust
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By analyzing existing cross correlation between HUMANA INC and First Trust Indxx, you can compare the effects of market volatilities on HUMANA and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and First Trust.
Diversification Opportunities for HUMANA and First Trust
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and First is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and First Trust Indxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Indxx 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Indxx has no effect on the direction of HUMANA i.e., HUMANA and First Trust go up and down completely randomly.
Pair Corralation between HUMANA and First Trust
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the First Trust. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.84 times less risky than First Trust. The bond trades about -0.04 of its potential returns per unit of risk. The First Trust Indxx is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,637 in First Trust Indxx on August 31, 2024 and sell it today you would earn a total of 269.00 from holding First Trust Indxx or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
HUMANA INC vs. First Trust Indxx
Performance |
| Timeline |
| HUMANA INC |
| First Trust Indxx |
HUMANA and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and First Trust
The main advantage of trading using opposite HUMANA and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| HUMANA vs. Air Products and | HUMANA vs. GE Vernova LLC | HUMANA vs. Aris Water Solutions | HUMANA vs. Pure Cycle |
| First Trust vs. Nexalin Technology | First Trust vs. Kilroy Realty Corp | First Trust vs. Highwoods Properties | First Trust vs. Karat Packaging |
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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