Correlation Between HUMANA and Gold Portfolio

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

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

Diversification Opportunities for HUMANA and Gold Portfolio

0.17

Correlation Coefficient

HUMANA  Gold Portfolio

Average diversification

The 3 months correlation between HUMANA and Gold is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Gold Portfolio Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Gold 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 Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Gold has no effect on the direction of HUMANA i.e., HUMANA and Gold Portfolio go up and down completely randomly.

Pair Corralation between HUMANA and Gold Portfolio

Assuming the 90 days trading horizon HUMANA is expected to generate 5.74 times less return on investment than Gold Portfolio. But when comparing it to its historical volatility, HUMANA INC is 2.66 times less risky than Gold Portfolio. It trades about 0.05 of its potential returns per unit of risk. Gold Portfolio Gold is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,829  in Gold Portfolio Gold on October 22, 2024 and sell it today you would earn a total of  803.00  from holding Gold Portfolio Gold or generate 43.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.68%
Values	Daily Returns

HUMANA INC  vs.  Gold Portfolio Gold

HUMANA INC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 6 (%) 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 recent stock price disturbance, may contribute to short-term losses for the investors.

Gold Portfolio Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Portfolio Gold has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with HUMANA and Gold Portfolio

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

The idea behind HUMANA INC and Gold Portfolio Gold 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.