Correlation Between Humana and SPDR Blackstone

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

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

Diversification Opportunities for Humana and SPDR Blackstone

0.41

Correlation Coefficient

Humana  SPDR Blackstone

Very weak diversification

The 3 months correlation between Humana and SPDR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and SPDR Blackstone Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Blackstone Senior 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 SPDR Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Blackstone Senior has no effect on the direction of Humana i.e., Humana and SPDR Blackstone go up and down completely randomly.

Pair Corralation between Humana and SPDR Blackstone

Considering the 90-day investment horizon Humana Inc is expected to generate 19.22 times more return on investment than SPDR Blackstone. However, Humana is 19.22 times more volatile than SPDR Blackstone Senior. It trades about 0.05 of its potential returns per unit of risk. SPDR Blackstone Senior is currently generating about 0.02 per unit of risk. If you would invest  25,525  in Humana Inc on December 26, 2024 and sell it today you would earn a total of  1,523  from holding Humana Inc or generate 5.97% return on investment over 90 days.

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

Humana Inc  vs.  SPDR Blackstone Senior

Humana Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Humana Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Humana may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SPDR Blackstone Senior

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Blackstone Senior are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, SPDR Blackstone is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Humana and SPDR Blackstone

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

The idea behind Humana Inc and SPDR Blackstone Senior 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.