Correlation Between HUMANA and Cohen Steers

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

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

Diversification Opportunities for HUMANA and Cohen Steers

0.46

Correlation Coefficient

HUMANA  Cohen Steers

Very weak diversification

The 3 months correlation between HUMANA and Cohen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Cohen Steers International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Interna 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Interna has no effect on the direction of HUMANA i.e., HUMANA and Cohen Steers go up and down completely randomly.

Pair Corralation between HUMANA and Cohen Steers

Assuming the 90 days trading horizon HUMANA is expected to generate 1.44 times less return on investment than Cohen Steers. In addition to that, HUMANA is 1.0 times more volatile than Cohen Steers International. It trades about 0.05 of its total potential returns per unit of risk. Cohen Steers International is currently generating about 0.08 per unit of volatility. If you would invest  789.00  in Cohen Steers International on December 30, 2024 and sell it today you would earn a total of  28.00  from holding Cohen Steers International or generate 3.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

HUMANA INC  vs.  Cohen Steers International

HUMANA INC

Risk-Adjusted Performance

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.

Cohen Steers Interna

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers International are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and Cohen Steers

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

The idea behind HUMANA INC and Cohen Steers International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.