Correlation Between NVIDIA and Humana
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Humana Inc, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Humana.
Diversification Opportunities for NVIDIA and Humana
Excellent diversification
The 3 months correlation between NVIDIA and Humana is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Humana go up and down completely randomly.
Pair Corralation between NVIDIA and Humana
Assuming the 90 days horizon NVIDIA is expected to generate 3.85 times less return on investment than Humana. But when comparing it to its historical volatility, NVIDIA is 1.62 times less risky than Humana. It trades about 0.11 of its potential returns per unit of risk. Humana Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 24,100 in Humana Inc on August 28, 2024 and sell it today you would earn a total of 5,200 from holding Humana Inc or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Humana Inc
Performance |
| Timeline |
| NVIDIA |
| Humana Inc |
NVIDIA and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Humana
The main advantage of trading using opposite NVIDIA and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.The idea behind NVIDIA 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.| Humana vs. TERADATA | Humana vs. CITY OFFICE REIT | Humana vs. Hyrican Informationssysteme Aktiengesellschaft | Humana vs. Datang International Power |
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.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |