Correlation Between DarioHealth Corp and Humana

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

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

Diversification Opportunities for DarioHealth Corp and Humana

-0.55

Correlation Coefficient

DarioHealth Corp  Humana

Excellent diversification

The 3 months correlation between DarioHealth and Humana is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and DarioHealth Corp 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 DarioHealth 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 DarioHealth Corp i.e., DarioHealth Corp and Humana go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Humana

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 1.65 times more return on investment than Humana. However, DarioHealth Corp is 1.65 times more volatile than Humana Inc. It trades about 0.01 of its potential returns per unit of risk. Humana Inc is currently generating about -0.08 per unit of risk. If you would invest  83.00  in DarioHealth Corp on September 1, 2024 and sell it today you would lose (4.00) from holding DarioHealth Corp or give up 4.82% of portfolio value over 90 days.

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

DarioHealth Corp  vs.  Humana Inc

DarioHealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DarioHealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, DarioHealth Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Humana Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Humana Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with DarioHealth Corp and Humana

The main advantage of trading using opposite DarioHealth Corp and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DarioHealth Corp 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 DarioHealth Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .