Correlation Between HUMANA and American Funds

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both HUMANA and American Funds 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 American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUMANA INC and American Funds 2010, you can compare the effects of market volatilities on HUMANA and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and American Funds.

Diversification Opportunities for HUMANA and American Funds

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between HUMANA and AMERICAN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and AMERICAN FUNDS 2010 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2010 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2010 has no effect on the direction of HUMANA i.e., HUMANA and American Funds go up and down completely randomly.

Pair Corralation between HUMANA and American Funds

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the American Funds. In addition to that, HUMANA is 2.73 times more volatile than American Funds 2010. It trades about -0.29 of its total potential returns per unit of risk. American Funds 2010 is currently generating about 0.01 per unit of volatility. If you would invest  1,142  in American Funds 2010 on December 1, 2023 and sell it today you would earn a total of  1.00  from holding American Funds 2010 or generate 0.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy90.48%
ValuesDaily Returns

HUMANA INC  vs.  AMERICAN FUNDS 2010

 Performance 
       Timeline  
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
American Funds 2010 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days American Funds 2010 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, American Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HUMANA and American Funds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUMANA and American Funds

The main advantage of trading using opposite HUMANA and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.
The idea behind HUMANA INC and American Funds 2010 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.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Positions Ratings
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
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
CEOs Directory
Screen CEOs from public companies around the world
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules