Correlation Between Humana and Aetna
Can any of the company-specific risk be diversified away by investing in both Humana and Aetna 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 Aetna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Aetna Inc, you can compare the effects of market volatilities on Humana and Aetna 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 Aetna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Aetna.
Diversification Opportunities for Humana and Aetna
Pay attention - limited upside
The 3 months correlation between Humana and Aetna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Aetna Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aetna Inc 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 Aetna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aetna Inc has no effect on the direction of Humana i.e., Humana and Aetna go up and down completely randomly.
Pair Corralation between Humana and Aetna
If you would invest (100.00) in Aetna Inc on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Aetna Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Humana Inc vs. Aetna Inc
Performance |
| Timeline |
| Humana Inc |
| Aetna Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Humana and Aetna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Aetna
The main advantage of trading using opposite Humana and Aetna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Aetna 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 Aetna will offset losses from the drop in Aetna's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Aetna vs. HCA Holdings | Aetna vs. Zillow Group Class | Aetna vs. Northern Lights | Aetna vs. VanEck Vectors Moodys |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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