Correlation Between Humana and VictoryShares Emerging
Can any of the company-specific risk be diversified away by investing in both Humana and VictoryShares Emerging 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 VictoryShares Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and VictoryShares Emerging Markets, you can compare the effects of market volatilities on Humana and VictoryShares Emerging 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 VictoryShares Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and VictoryShares Emerging.
Diversification Opportunities for Humana and VictoryShares Emerging
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humana and VictoryShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and VictoryShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Emerging 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 VictoryShares Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Emerging has no effect on the direction of Humana i.e., Humana and VictoryShares Emerging go up and down completely randomly.
Pair Corralation between Humana and VictoryShares Emerging
Considering the 90-day investment horizon Humana Inc is expected to generate 3.19 times more return on investment than VictoryShares Emerging. However, Humana is 3.19 times more volatile than VictoryShares Emerging Markets. It trades about 0.19 of its potential returns per unit of risk. VictoryShares Emerging Markets is currently generating about -0.15 per unit of risk. If you would invest 26,109 in Humana Inc on August 29, 2024 and sell it today you would earn a total of 3,450 from holding Humana Inc or generate 13.21% 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. VictoryShares Emerging Markets
Performance |
| Timeline |
| Humana Inc |
| VictoryShares Emerging |
Humana and VictoryShares Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and VictoryShares Emerging
The main advantage of trading using opposite Humana and VictoryShares Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, VictoryShares Emerging 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 VictoryShares Emerging will offset losses from the drop in VictoryShares Emerging's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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