Correlation Between Humana and DarioHealth Corp

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

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

Diversification Opportunities for Humana and DarioHealth Corp

-0.08

Correlation Coefficient

Humana  DarioHealth Corp

Good diversification

The 3 months correlation between Humana and DarioHealth is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and DarioHealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DarioHealth Corp 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 DarioHealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DarioHealth Corp has no effect on the direction of Humana i.e., Humana and DarioHealth Corp go up and down completely randomly.

Pair Corralation between Humana and DarioHealth Corp

Considering the 90-day investment horizon Humana Inc is expected to under-perform the DarioHealth Corp. But the etf apears to be less risky and, when comparing its historical volatility, Humana Inc is 5.08 times less risky than DarioHealth Corp. The etf trades about -0.08 of its potential returns per unit of risk. The DarioHealth Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  79.00  in DarioHealth Corp on November 28, 2024 and sell it today you would lose (10.00) from holding DarioHealth Corp or give up 12.66% of portfolio value over 90 days.

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

Humana Inc  vs.  DarioHealth Corp

Humana Inc

Risk-Adjusted Performance

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 March 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

DarioHealth Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DarioHealth Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, DarioHealth Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humana and DarioHealth Corp

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

The idea behind Humana Inc and DarioHealth Corp 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.