Correlation Between Humana and IShares MSCI

Can any of the company-specific risk be diversified away by investing in both Humana and IShares 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 IShares 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 iShares MSCI Global, you can compare the effects of market volatilities on Humana and IShares 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and IShares MSCI.

Diversification Opportunities for Humana and IShares MSCI

-0.54

Correlation Coefficient

Humana  IShares MSCI

Excellent diversification

The 3 months correlation between Humana and IShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and iShares MSCI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Global 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Global has no effect on the direction of Humana i.e., Humana and IShares MSCI go up and down completely randomly.

Pair Corralation between Humana and IShares MSCI

Considering the 90-day investment horizon Humana Inc is expected to under-perform the IShares MSCI. In addition to that, Humana is 1.97 times more volatile than iShares MSCI Global. It trades about -0.05 of its total potential returns per unit of risk. iShares MSCI Global is currently generating about 0.01 per unit of volatility. If you would invest  3,858  in iShares MSCI Global on September 15, 2024 and sell it today you would earn a total of  12.00  from holding iShares MSCI Global or generate 0.31% return on investment over 90 days.

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

Humana Inc  vs.  iShares MSCI Global

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 latest abnormal performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

iShares MSCI Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, IShares MSCI is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Humana and IShares MSCI

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

The idea behind Humana Inc and iShares MSCI Global 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..