Correlation Between Humana and PIMCO Preferred
Can any of the company-specific risk be diversified away by investing in both Humana and PIMCO 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 PIMCO 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 PIMCO Preferred And, you can compare the effects of market volatilities on Humana and PIMCO 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 PIMCO Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and PIMCO Preferred.
Diversification Opportunities for Humana and PIMCO Preferred
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and PIMCO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and PIMCO Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Preferred And 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 PIMCO Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Preferred And has no effect on the direction of Humana i.e., Humana and PIMCO Preferred go up and down completely randomly.
Pair Corralation between Humana and PIMCO Preferred
Considering the 90-day investment horizon Humana Inc is expected to generate 16.33 times more return on investment than PIMCO Preferred. However, Humana is 16.33 times more volatile than PIMCO Preferred And. It trades about 0.21 of its potential returns per unit of risk. PIMCO Preferred And is currently generating about -0.04 per unit of risk. If you would invest 26,073 in Humana Inc on August 26, 2024 and sell it today you would earn a total of 3,738 from holding Humana Inc or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. PIMCO Preferred And
Performance |
| Timeline |
| Humana Inc |
| PIMCO Preferred And |
Humana and PIMCO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and PIMCO Preferred
The main advantage of trading using opposite Humana and PIMCO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, PIMCO 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 PIMCO Preferred will offset losses from the drop in PIMCO Preferred's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| PIMCO Preferred vs. ETF Series Solutions | PIMCO Preferred vs. Aquagold International | PIMCO Preferred vs. Morningstar Unconstrained Allocation | PIMCO Preferred vs. High Yield Municipal Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |