Correlation Between HUMANA and Capital Income
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By analyzing existing cross correlation between HUMANA INC and Capital Income Builder, you can compare the effects of market volatilities on HUMANA and Capital Income 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 Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Capital Income.
Diversification Opportunities for HUMANA and Capital Income
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and Capital is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder 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 Capital Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of HUMANA i.e., HUMANA and Capital Income go up and down completely randomly.
Pair Corralation between HUMANA and Capital Income
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Capital Income. In addition to that, HUMANA is 2.81 times more volatile than Capital Income Builder. It trades about -0.18 of its total potential returns per unit of risk. Capital Income Builder is currently generating about 0.16 per unit of volatility. If you would invest 7,233 in Capital Income Builder on September 2, 2024 and sell it today you would earn a total of 99.00 from holding Capital Income Builder or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. Capital Income Builder
Performance |
| Timeline |
| HUMANA INC |
| Capital Income Builder |
HUMANA and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Capital Income
The main advantage of trading using opposite HUMANA and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Capital Income 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 Capital Income will offset losses from the drop in Capital Income's long position.The idea behind HUMANA INC and Capital Income Builder 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.| Capital Income vs. T Rowe Price | Capital Income vs. Tiaa Cref Smallmid Cap Equity | Capital Income vs. Sentinel Small Pany | Capital Income vs. Fidelity Advisor Diversified |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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