Correlation Between Humana and TCW ETF
Can any of the company-specific risk be diversified away by investing in both Humana and TCW ETF 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 TCW ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and TCW ETF Trust, you can compare the effects of market volatilities on Humana and TCW ETF 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 TCW ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and TCW ETF.
Diversification Opportunities for Humana and TCW ETF
Very good diversification
The 3 months correlation between Humana and TCW is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and TCW ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCW ETF Trust 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 TCW ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCW ETF Trust has no effect on the direction of Humana i.e., Humana and TCW ETF go up and down completely randomly.
Pair Corralation between Humana and TCW ETF
Considering the 90-day investment horizon Humana Inc is expected to generate 49.65 times more return on investment than TCW ETF. However, Humana is 49.65 times more volatile than TCW ETF Trust. It trades about 0.32 of its potential returns per unit of risk. TCW ETF Trust is currently generating about 0.57 per unit of risk. If you would invest 25,485 in Humana Inc on October 23, 2024 and sell it today you would earn a total of 2,982 from holding Humana Inc or generate 11.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 94.74% |
Values | Daily Returns |
Humana Inc vs. TCW ETF Trust
Performance |
Timeline |
Humana Inc |
TCW ETF Trust |
Humana and TCW ETF Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Humana and TCW ETF
The main advantage of trading using opposite Humana and TCW ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, TCW ETF 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 TCW ETF will offset losses from the drop in TCW ETF's long position.Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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