Correlation Between Humana and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Humana and Nuveen Preferred 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 Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Nuveen Preferred and, you can compare the effects of market volatilities on Humana and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Nuveen Preferred.
Diversification Opportunities for Humana and Nuveen Preferred
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and Nuveen is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Nuveen Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred 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 Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred has no effect on the direction of Humana i.e., Humana and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Humana and Nuveen Preferred
Considering the 90-day investment horizon Humana Inc is expected to generate 22.95 times more return on investment than Nuveen Preferred. However, Humana is 22.95 times more volatile than Nuveen Preferred and. It trades about 0.23 of its potential returns per unit of risk. Nuveen Preferred and is currently generating about 0.25 per unit of risk. If you would invest 25,783 in Humana Inc on September 1, 2024 and sell it today you would earn a total of 3,855 from holding Humana Inc or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Humana Inc vs. Nuveen Preferred and
Performance |
| Timeline |
| Humana Inc |
| Nuveen Preferred |
Humana and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Nuveen Preferred
The main advantage of trading using opposite Humana and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Nuveen Preferred vs. VanEck Preferred Securities | Nuveen Preferred vs. Invesco Preferred ETF | Nuveen Preferred vs. Invesco Financial Preferred | Nuveen Preferred vs. Global X SuperIncome |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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