Correlation Between HUMANA and William Blair

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

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

Diversification Opportunities for HUMANA and William Blair

-0.01

Correlation Coefficient

HUMANA  William Blair

Good diversification

The 3 months correlation between HUMANA and William is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and William Blair Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Emerging 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Emerging has no effect on the direction of HUMANA i.e., HUMANA and William Blair go up and down completely randomly.

Pair Corralation between HUMANA and William Blair

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the William Blair. In addition to that, HUMANA is 1.39 times more volatile than William Blair Emerging. It trades about -0.18 of its total potential returns per unit of risk. William Blair Emerging is currently generating about 0.07 per unit of volatility. If you would invest  2,111  in William Blair Emerging on September 12, 2024 and sell it today you would earn a total of  55.00  from holding William Blair Emerging or generate 2.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

HUMANA INC  vs.  William Blair Emerging

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 weak 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.

William Blair Emerging

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in William Blair Emerging are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, William Blair is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and William Blair

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

The idea behind HUMANA INC and William Blair Emerging 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.