Correlation Between HUMANA and Aptus Collared

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

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

Diversification Opportunities for HUMANA and Aptus Collared

-0.06

Correlation Coefficient

HUMANA  Aptus Collared

Good diversification

The 3 months correlation between HUMANA and Aptus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Aptus Collared Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Collared Income 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 Aptus Collared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Collared Income has no effect on the direction of HUMANA i.e., HUMANA and Aptus Collared go up and down completely randomly.

Pair Corralation between HUMANA and Aptus Collared

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Aptus Collared. In addition to that, HUMANA is 1.56 times more volatile than Aptus Collared Income. It trades about -0.22 of its total potential returns per unit of risk. Aptus Collared Income is currently generating about 0.18 per unit of volatility. If you would invest  3,870  in Aptus Collared Income on July 6, 2024 and sell it today you would earn a total of  83.00  from holding Aptus Collared Income or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

HUMANA INC  vs.  Aptus Collared Income

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 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.

Aptus Collared Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Collared Income are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Aptus Collared is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and Aptus Collared

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

The idea behind HUMANA INC and Aptus Collared Income 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.