Correlation Between Humana and Xtrackers MSCI

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

By analyzing existing cross correlation between Humana Inc and Xtrackers MSCI EAFE, you can compare the effects of market volatilities on Humana and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Xtrackers MSCI.

Diversification Opportunities for Humana and Xtrackers MSCI

0.0

Correlation Coefficient

Humana  Xtrackers MSCI

Pay attention - limited upside

The 3 months correlation between Humana and Xtrackers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Xtrackers MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI EAFE 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI EAFE has no effect on the direction of Humana i.e., Humana and Xtrackers MSCI go up and down completely randomly.

Pair Corralation between Humana and Xtrackers MSCI

Considering the 90-day investment horizon Humana Inc is expected to generate 2.94 times more return on investment than Xtrackers MSCI. However, Humana is 2.94 times more volatile than Xtrackers MSCI EAFE. It trades about 0.05 of its potential returns per unit of risk. Xtrackers MSCI EAFE is currently generating about 0.12 per unit of risk. If you would invest  25,255  in Humana Inc on December 29, 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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Humana Inc  vs.  Xtrackers MSCI EAFE

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.

Xtrackers MSCI EAFE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI EAFE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Xtrackers MSCI is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Humana and Xtrackers MSCI

The main advantage of trading using opposite Humana and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.

The idea behind Humana Inc and Xtrackers MSCI EAFE 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.