Correlation Between HUMANA and DBX ETF

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

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

Diversification Opportunities for HUMANA and DBX ETF

0.05

Correlation Coefficient

HUMANA  DBX ETF

Significant diversification

The 3 months correlation between HUMANA and DBX is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of HUMANA i.e., HUMANA and DBX ETF go up and down completely randomly.

Pair Corralation between HUMANA and DBX ETF

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the DBX ETF. In addition to that, HUMANA is 1.24 times more volatile than DBX ETF Trust. It trades about -0.18 of its total potential returns per unit of risk. DBX ETF Trust is currently generating about -0.15 per unit of volatility. If you would invest  2,782  in DBX ETF Trust on September 22, 2024 and sell it today you would lose (175.00) from holding DBX ETF Trust or give up 6.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

HUMANA INC  vs.  DBX ETF Trust

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 uncertain 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.

DBX ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DBX ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, DBX ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HUMANA and DBX ETF

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

The idea behind HUMANA INC and DBX ETF Trust 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..