Correlation Between Humana and Real Estate

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

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

Diversification Opportunities for Humana and Real Estate

-0.4

Correlation Coefficient

Humana  Real Estate

Very good diversification

The 3 months correlation between Humana and Real is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Real Estate Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Investment 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Investment has no effect on the direction of Humana i.e., Humana and Real Estate go up and down completely randomly.

Pair Corralation between Humana and Real Estate

Assuming the 90 days trading horizon Humana Inc is expected to under-perform the Real Estate. In addition to that, Humana is 2.34 times more volatile than Real Estate Investment. It trades about -0.13 of its total potential returns per unit of risk. Real Estate Investment is currently generating about 0.11 per unit of volatility. If you would invest  780.00  in Real Estate Investment on April 17, 2025 and sell it today you would earn a total of  49.00  from holding Real Estate Investment or generate 6.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Humana Inc  vs.  Real Estate Investment

Humana Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Humana Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Real Estate Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Real Estate Investment are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical indicators, Real Estate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Humana and Real Estate

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

The idea behind Humana Inc and Real Estate Investment 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.