Correlation Between Humana and EnGene Holdings

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

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

Diversification Opportunities for Humana and EnGene Holdings

-0.16

Correlation Coefficient

Humana  EnGene Holdings

Good diversification

The 3 months correlation between Humana and EnGene is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common 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 EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Humana i.e., Humana and EnGene Holdings go up and down completely randomly.

Pair Corralation between Humana and EnGene Holdings

Considering the 90-day investment horizon Humana Inc is expected to under-perform the EnGene Holdings. But the etf apears to be less risky and, when comparing its historical volatility, Humana Inc is 2.41 times less risky than EnGene Holdings. The etf trades about -0.1 of its potential returns per unit of risk. The enGene Holdings Common is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  641.00  in enGene Holdings Common on September 21, 2024 and sell it today you would lose (53.00) from holding enGene Holdings Common or give up 8.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Humana Inc  vs.  enGene Holdings Common

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

enGene Holdings Common

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, EnGene Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humana and EnGene Holdings

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

The idea behind Humana Inc and enGene Holdings Common 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.