Correlation Between HUMANA and Dexterra

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

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

Diversification Opportunities for HUMANA and Dexterra

-0.21

Correlation Coefficient

HUMANA  Dexterra

Very good diversification

The 3 months correlation between HUMANA and Dexterra is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group 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 Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of HUMANA i.e., HUMANA and Dexterra go up and down completely randomly.

Pair Corralation between HUMANA and Dexterra

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Dexterra. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.97 times less risky than Dexterra. The bond trades about -0.19 of its potential returns per unit of risk. The Dexterra Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  468.00  in Dexterra Group on September 14, 2024 and sell it today you would earn a total of  56.00  from holding Dexterra Group or generate 11.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

HUMANA INC  vs.  Dexterra Group

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 latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Dexterra Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dexterra Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Dexterra may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with HUMANA and Dexterra

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

The idea behind HUMANA INC and Dexterra Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.