Correlation Between HUMANA and ClearBridge Dividend

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

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

Diversification Opportunities for HUMANA and ClearBridge Dividend

-0.54

Correlation Coefficient

HUMANA  ClearBridge Dividend

Excellent diversification

The 3 months correlation between HUMANA and ClearBridge is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and ClearBridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Dividend 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 ClearBridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Dividend has no effect on the direction of HUMANA i.e., HUMANA and ClearBridge Dividend go up and down completely randomly.

Pair Corralation between HUMANA and ClearBridge Dividend

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the ClearBridge Dividend. In addition to that, HUMANA is 1.31 times more volatile than ClearBridge Dividend Strategy. It trades about -0.18 of its total potential returns per unit of risk. ClearBridge Dividend Strategy is currently generating about 0.16 per unit of volatility. If you would invest  4,899  in ClearBridge Dividend Strategy on September 12, 2024 and sell it today you would earn a total of  314.00  from holding ClearBridge Dividend Strategy or generate 6.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

HUMANA INC  vs.  ClearBridge Dividend Strategy

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.

ClearBridge Dividend

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ClearBridge Dividend Strategy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ClearBridge Dividend is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HUMANA and ClearBridge Dividend

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

The idea behind HUMANA INC and ClearBridge Dividend Strategy 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.