Correlation Between HUMANA and VanEck ETF

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

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

Diversification Opportunities for HUMANA and VanEck ETF

-0.65

Correlation Coefficient

HUMANA  VanEck ETF

Excellent diversification

The 3 months correlation between HUMANA and VanEck is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF 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 VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of HUMANA i.e., HUMANA and VanEck ETF go up and down completely randomly.

Pair Corralation between HUMANA and VanEck ETF

Assuming the 90 days trading horizon HUMANA INC is expected to generate 880.89 times more return on investment than VanEck ETF. However, HUMANA is 880.89 times more volatile than VanEck ETF Trust. It trades about 0.07 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.36 per unit of risk. If you would invest  8,063  in HUMANA INC on September 5, 2024 and sell it today you would lose (368.00) from holding HUMANA INC or give up 4.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.74%
Values	Daily Returns

HUMANA INC  vs.  VanEck ETF Trust

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.

VanEck ETF Trust

Risk-Adjusted Performance

39 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck ETF Trust are ranked lower than 39 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, VanEck ETF is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with HUMANA and VanEck ETF

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

The idea behind HUMANA INC and VanEck ETF 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.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.