Correlation Between Capital Income and HUMANA
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By analyzing existing cross correlation between Capital Income Builder and HUMANA INC, you can compare the effects of market volatilities on Capital Income 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 Capital Income with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and HUMANA.
Diversification Opportunities for Capital Income and HUMANA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and HUMANA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Capital Income 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 Capital Income Builder 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 Capital Income i.e., Capital Income and HUMANA go up and down completely randomly.
Pair Corralation between Capital Income and HUMANA
Assuming the 90 days horizon Capital Income is expected to generate 147.42 times less return on investment than HUMANA. But when comparing it to its historical volatility, Capital Income Builder is 157.84 times less risky than HUMANA. It trades about 0.08 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,081 in HUMANA INC on August 29, 2024 and sell it today you would lose (46.00) from holding HUMANA INC or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.55% |
| Values | Daily Returns |
Capital Income Builder vs. HUMANA INC
Performance |
| Timeline |
| Capital Income Builder |
| HUMANA INC |
Capital Income and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and HUMANA
The main advantage of trading using opposite Capital Income and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income 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.| Capital Income vs. Transamerica Intermediate Muni | Capital Income vs. California High Yield Municipal | Capital Income vs. Counterpoint Tactical Municipal | Capital Income vs. Ab Impact Municipal |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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