Correlation Between Universal American and Humana
Can any of the company-specific risk be diversified away by investing in both Universal American 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 Universal American and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal American Corp and Humana Inc, you can compare the effects of market volatilities on Universal American 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 Universal American with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal American and Humana.
Diversification Opportunities for Universal American and Humana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and Humana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal American Corp and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Universal American 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 Universal American Corp 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 Universal American i.e., Universal American and Humana go up and down completely randomly.
Pair Corralation between Universal American and Humana
If you would invest 31,962 in Humana Inc on February 9, 2024 and sell it today you would earn a total of 452.00 from holding Humana Inc or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Universal American Corp vs. Humana Inc
Performance |
| Timeline |
| Universal American Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Humana Inc |
Universal American and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal American and Humana
The main advantage of trading using opposite Universal American and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal American 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.| Universal American vs. Wallbox NV | Universal American vs. Molson Coors Brewing | Universal American vs. Visteon Corp | Universal American vs. Willamette Valley Vineyards |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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