Correlation Between HUMANA and JP Morgan

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

Diversification Opportunities for HUMANA and JP Morgan

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between HUMANA and JADE is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange 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 JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of HUMANA i.e., HUMANA and JP Morgan go up and down completely randomly.

Pair Corralation between HUMANA and JP Morgan

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the JP Morgan. In addition to that, HUMANA is 1.46 times more volatile than JP Morgan Exchange Traded. It trades about -0.19 of its total potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about -0.03 per unit of volatility. If you would invest  4,880  in JP Morgan Exchange Traded on September 12, 2024 and sell it today you would lose (24.00) from holding JP Morgan Exchange Traded or give up 0.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

HUMANA INC  vs.  JP Morgan Exchange Traded

 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 weak 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.
JP Morgan Exchange 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, JP Morgan is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

HUMANA and JP Morgan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and JP Morgan

The main advantage of trading using opposite HUMANA and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.
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The idea behind HUMANA INC and JP Morgan Exchange Traded 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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