Correlation Between Hugo Boss and Humana

Can any of the company-specific risk be diversified away by investing in both Hugo Boss 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 Hugo Boss and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hugo Boss AG and Humana Inc, you can compare the effects of market volatilities on Hugo Boss 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 Hugo Boss with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugo Boss and Humana.

Diversification Opportunities for Hugo Boss and Humana

0.34

Correlation Coefficient

Hugo Boss  Humana

Weak diversification

The 3 months correlation between Hugo and Humana is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hugo Boss AG and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Hugo Boss 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 Hugo Boss AG 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 Hugo Boss i.e., Hugo Boss and Humana go up and down completely randomly.

Pair Corralation between Hugo Boss and Humana

Assuming the 90 days trading horizon Hugo Boss AG is expected to under-perform the Humana. In addition to that, Hugo Boss is 1.07 times more volatile than Humana Inc. It trades about -0.14 of its total potential returns per unit of risk. Humana Inc is currently generating about 0.04 per unit of volatility. If you would invest  24,151  in Humana Inc on December 29, 2024 and sell it today you would earn a total of  847.00  from holding Humana Inc or generate 3.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Hugo Boss AG  vs.  Humana Inc

Hugo Boss AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hugo Boss AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Humana Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Humana Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Humana is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hugo Boss and Humana

The main advantage of trading using opposite Hugo Boss and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugo Boss 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.

The idea behind Hugo Boss AG and Humana Inc 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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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.