Correlation Between JD Bancshares and HUMANA

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

By analyzing existing cross correlation between JD Bancshares and HUMANA INC, you can compare the effects of market volatilities on JD Bancshares and HUMANA 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 JD Bancshares with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Bancshares and HUMANA.

Diversification Opportunities for JD Bancshares and HUMANA

-0.18

Correlation Coefficient

JD Bancshares  HUMANA

Good diversification

The 3 months correlation between JDVB and HUMANA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding JD Bancshares and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and JD Bancshares 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 JD Bancshares are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of JD Bancshares i.e., JD Bancshares and HUMANA go up and down completely randomly.

Pair Corralation between JD Bancshares and HUMANA

Given the investment horizon of 90 days JD Bancshares is expected to generate 0.9 times more return on investment than HUMANA. However, JD Bancshares is 1.12 times less risky than HUMANA. It trades about 0.2 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.19 per unit of risk. If you would invest  2,350  in JD Bancshares on September 21, 2024 and sell it today you would earn a total of  100.00  from holding JD Bancshares or generate 4.26% return on investment over 90 days.

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

JD Bancshares  vs.  HUMANA INC

JD Bancshares

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JD Bancshares are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JD Bancshares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Pair Trading with JD Bancshares and HUMANA

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

The idea behind JD Bancshares and HUMANA INC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.