Correlation Between IShares Silver and HUMANA

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

By analyzing existing cross correlation between iShares Silver Trust and HUMANA INC, you can compare the effects of market volatilities on IShares Silver and HUMANA 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 IShares Silver with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and HUMANA.

Diversification Opportunities for IShares Silver and HUMANA

-0.21

Correlation Coefficient

IShares Silver  HUMANA

Very good diversification

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

Pair Corralation between IShares Silver and HUMANA

Considering the 90-day investment horizon iShares Silver Trust is expected to under-perform the HUMANA. But the etf apears to be less risky and, when comparing its historical volatility, iShares Silver Trust is 1.12 times less risky than HUMANA. The etf trades about -0.02 of its potential returns per unit of risk. The HUMANA INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7,991  in HUMANA INC on February 4, 2024 and sell it today you would earn a total of  105.00  from holding HUMANA INC or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

iShares Silver Trust  vs.  HUMANA INC

iShares Silver Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Silver Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, IShares Silver showed solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Silver and HUMANA

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

The idea behind iShares Silver Trust and HUMANA INC 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.