Correlation Between Owens Minor and Humana

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

By analyzing existing cross correlation between Owens Minor and Humana Inc, you can compare the effects of market volatilities on Owens Minor 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 Owens Minor with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Owens Minor and Humana.

Diversification Opportunities for Owens Minor and Humana

0.57

Correlation Coefficient

Owens Minor  Humana

Very weak diversification

The 3 months correlation between Owens and Humana is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Owens Minor and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Owens Minor 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 Owens Minor 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 has no effect on the direction of Owens Minor i.e., Owens Minor and Humana go up and down completely randomly.

Pair Corralation between Owens Minor and Humana

Considering the 90-day investment horizon Owens Minor is expected to generate 1.29 times more return on investment than Humana. However, Owens Minor is 1.29 times more volatile than Humana Inc. It trades about -0.01 of its potential returns per unit of risk. Humana Inc is currently generating about -0.09 per unit of risk. If you would invest  1,572  in Owens Minor on September 5, 2024 and sell it today you would lose (138.00) from holding Owens Minor or give up 8.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Owens Minor  vs.  Humana Inc

Owens Minor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Owens Minor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Owens Minor is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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. In spite of abnormal performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Owens Minor and Humana

The main advantage of trading using opposite Owens Minor and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Minor 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 Owens Minor and Humana Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.