Correlation Between HUMANA and Innovator ETFs

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

By analyzing existing cross correlation between HUMANA INC and Innovator ETFs Trust, you can compare the effects of market volatilities on HUMANA and Innovator ETFs 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 Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Innovator ETFs.

Diversification Opportunities for HUMANA and Innovator ETFs

-0.15

Correlation Coefficient

HUMANA  Innovator ETFs

Good diversification

The 3 months correlation between HUMANA and Innovator is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust 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 Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of HUMANA i.e., HUMANA and Innovator ETFs go up and down completely randomly.

Pair Corralation between HUMANA and Innovator ETFs

Assuming the 90 days trading horizon HUMANA is expected to generate 1.6 times less return on investment than Innovator ETFs. But when comparing it to its historical volatility, HUMANA INC is 1.47 times less risky than Innovator ETFs. It trades about 0.13 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,727  in Innovator ETFs Trust on October 6, 2024 and sell it today you would earn a total of  290.00  from holding Innovator ETFs Trust or generate 7.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

HUMANA INC  vs.  Innovator ETFs Trust

HUMANA INC

Risk-Adjusted Performance

4 of 100

Insignificant

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. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Innovator ETFs Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Innovator ETFs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HUMANA and Innovator ETFs

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

The idea behind HUMANA INC and Innovator ETFs Trust 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.