Correlation Between HUMANA and Janus Global

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

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

Diversification Opportunities for HUMANA and Janus Global

0.08

Correlation Coefficient

HUMANA  Janus Global

Significant diversification

The 3 months correlation between HUMANA and Janus is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Janus Global Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Life 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 Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Life has no effect on the direction of HUMANA i.e., HUMANA and Janus Global go up and down completely randomly.

Pair Corralation between HUMANA and Janus Global

Assuming the 90 days trading horizon HUMANA INC is expected to generate about the same return on investment as Janus Global Life. However, HUMANA is 2.01 times more volatile than Janus Global Life. It trades about 0.08 of its potential returns per unit of risk. Janus Global Life is currently producing about 0.16 per unit of risk. If you would invest  7,260  in Janus Global Life on March 7, 2024 and sell it today you would earn a total of  186.00  from holding Janus Global Life or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

HUMANA INC  vs.  Janus Global Life

HUMANA INC

Risk-Adjusted Performance

1 of 100

Modest

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.

Janus Global Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Global Life has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Janus Global 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 Janus Global

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

The idea behind HUMANA INC and Janus Global Life 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..