Correlation Between JPMorgan Chase and HUMANA

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

By analyzing existing cross correlation between JPMorgan Chase Co and HUMANA INC 495, you can compare the effects of market volatilities on JPMorgan Chase and HUMANA 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 JPMorgan Chase with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and HUMANA.

Diversification Opportunities for JPMorgan Chase and HUMANA

-0.56

Correlation Coefficient

JPMorgan Chase  HUMANA

Excellent diversification

The 3 months correlation between JPMorgan and HUMANA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and HUMANA INC 495 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 495 and JPMorgan Chase 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 JPMorgan Chase Co are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC 495 has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and HUMANA go up and down completely randomly.

Pair Corralation between JPMorgan Chase and HUMANA

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 50.64 times less return on investment than HUMANA. But when comparing it to its historical volatility, JPMorgan Chase Co is 2.45 times less risky than HUMANA. It trades about 0.01 of its potential returns per unit of risk. HUMANA INC 495 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  8,723  in HUMANA INC 495 on September 14, 2024 and sell it today you would earn a total of  845.00  from holding HUMANA INC 495 or generate 9.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.95%
Values	Daily Returns

JPMorgan Chase Co  vs.  HUMANA INC 495

JPMorgan Chase

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC 495

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC 495 are ranked lower than 1 (%) 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.

Pair Trading with JPMorgan Chase and HUMANA

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

The idea behind JPMorgan Chase Co and HUMANA INC 495 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.