Correlation Between Uber Technologies and Humana

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Can any of the company-specific risk be diversified away by investing in both Uber Technologies 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 Uber Technologies and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Humana Inc, you can compare the effects of market volatilities on Uber Technologies 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 Uber Technologies with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Humana.

Diversification Opportunities for Uber Technologies and Humana

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Uber Technologies and Humana is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Uber Technologies 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 Uber Technologies 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 Uber Technologies i.e., Uber Technologies and Humana go up and down completely randomly.

Pair Corralation between Uber Technologies and Humana

Given the investment horizon of 90 days Uber Technologies is expected to generate 2.64 times more return on investment than Humana. However, Uber Technologies is 2.64 times more volatile than Humana Inc. It trades about 0.06 of its potential returns per unit of risk. Humana Inc is currently generating about -0.06 per unit of risk. If you would invest  2,750  in Uber Technologies on August 29, 2022 and sell it today you would earn a total of  100.00  from holding Uber Technologies or generate 3.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Uber Technologies  vs.  Humana Inc

 Performance (%) 
       Timeline  
Uber Technologies 
Uber Technologies Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Uber Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Uber Technologies Price Channel

Humana Inc 
Humana Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Humana Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, Humana may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Humana Price Channel

Uber Technologies and Humana Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Uber Technologies and Humana

The main advantage of trading using opposite Uber Technologies and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies 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.
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The idea behind Uber Technologies 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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