Correlation Between Humana and JPMorgan Active
Can any of the company-specific risk be diversified away by investing in both Humana and JPMorgan Active 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 JPMorgan Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and JPMorgan Active Value, you can compare the effects of market volatilities on Humana and JPMorgan Active 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 JPMorgan Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and JPMorgan Active.
Diversification Opportunities for Humana and JPMorgan Active
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Humana and JPMorgan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and JPMorgan Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Active Value 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 JPMorgan Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Active Value has no effect on the direction of Humana i.e., Humana and JPMorgan Active go up and down completely randomly.
Pair Corralation between Humana and JPMorgan Active
Considering the 90-day investment horizon Humana Inc is expected to under-perform the JPMorgan Active. In addition to that, Humana is 3.67 times more volatile than JPMorgan Active Value. It trades about -0.03 of its total potential returns per unit of risk. JPMorgan Active Value is currently generating about -0.06 per unit of volatility. If you would invest 6,799 in JPMorgan Active Value on December 2, 2024 and sell it today you would lose (196.00) from holding JPMorgan Active Value or give up 2.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Humana Inc vs. JPMorgan Active Value
Performance |
Timeline |
Humana Inc |
JPMorgan Active Value |
Humana and JPMorgan Active Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Humana and JPMorgan Active
The main advantage of trading using opposite Humana and JPMorgan Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, JPMorgan Active 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 JPMorgan Active will offset losses from the drop in JPMorgan Active'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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