Correlation Between Cosmos Health and Humana

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

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

Diversification Opportunities for Cosmos Health and Humana

0.58

Correlation Coefficient

Cosmos Health  Humana

Very weak diversification

The 3 months correlation between Cosmos and Humana is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Health and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Cosmos Health 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 Cosmos Health 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 Cosmos Health i.e., Cosmos Health and Humana go up and down completely randomly.

Pair Corralation between Cosmos Health and Humana

Given the investment horizon of 90 days Cosmos Health is expected to under-perform the Humana. In addition to that, Cosmos Health is 2.61 times more volatile than Humana Inc. It trades about -0.08 of its total potential returns per unit of risk. Humana Inc is currently generating about 0.05 per unit of volatility. If you would invest  25,255  in Humana Inc on December 28, 2024 and sell it today you would earn a total of  1,203  from holding Humana Inc or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cosmos Health  vs.  Humana Inc

Cosmos Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cosmos Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Humana Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Humana Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Humana is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cosmos Health and Humana

The main advantage of trading using opposite Cosmos Health and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Health 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 Cosmos Health 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.