Correlation Between Humana and Invesco Dynamic

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

By analyzing existing cross correlation between Humana Inc and Invesco Dynamic Building, you can compare the effects of market volatilities on Humana and Invesco Dynamic 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 Invesco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Invesco Dynamic.

Diversification Opportunities for Humana and Invesco Dynamic

-0.52

Correlation Coefficient

Humana  Invesco Dynamic

Excellent diversification

The 3 months correlation between Humana and Invesco is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Invesco Dynamic Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Building 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 Invesco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Building has no effect on the direction of Humana i.e., Humana and Invesco Dynamic go up and down completely randomly.

Pair Corralation between Humana and Invesco Dynamic

Considering the 90-day investment horizon Humana Inc is expected to under-perform the Invesco Dynamic. In addition to that, Humana is 1.51 times more volatile than Invesco Dynamic Building. It trades about -0.08 of its total potential returns per unit of risk. Invesco Dynamic Building is currently generating about 0.15 per unit of volatility. If you would invest  6,253  in Invesco Dynamic Building on February 5, 2024 and sell it today you would earn a total of  862.00  from holding Invesco Dynamic Building or generate 13.79% return on investment over 90 days.

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

Humana Inc  vs.  Invesco Dynamic Building

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 latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Invesco Dynamic Building

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Dynamic Building are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward-looking signals, Invesco Dynamic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humana and Invesco Dynamic

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

The idea behind Humana Inc and Invesco Dynamic Building 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.