Correlation Between HUMANA and WisdomTree LargeCap
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By analyzing existing cross correlation between HUMANA INC and WisdomTree LargeCap Dividend, you can compare the effects of market volatilities on HUMANA and WisdomTree LargeCap 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 WisdomTree LargeCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and WisdomTree LargeCap.
Diversification Opportunities for HUMANA and WisdomTree LargeCap
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HUMANA and WisdomTree is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and WisdomTree LargeCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree LargeCap 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 WisdomTree LargeCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree LargeCap has no effect on the direction of HUMANA i.e., HUMANA and WisdomTree LargeCap go up and down completely randomly.
Pair Corralation between HUMANA and WisdomTree LargeCap
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the WisdomTree LargeCap. In addition to that, HUMANA is 2.02 times more volatile than WisdomTree LargeCap Dividend. It trades about -0.09 of its total potential returns per unit of risk. WisdomTree LargeCap Dividend is currently generating about 0.12 per unit of volatility. If you would invest 8,062 in WisdomTree LargeCap Dividend on November 28, 2024 and sell it today you would earn a total of 90.00 from holding WisdomTree LargeCap Dividend or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HUMANA INC vs. WisdomTree LargeCap Dividend
Performance |
| Timeline |
| HUMANA INC |
| WisdomTree LargeCap |
HUMANA and WisdomTree LargeCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and WisdomTree LargeCap
The main advantage of trading using opposite HUMANA and WisdomTree LargeCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, WisdomTree LargeCap 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 WisdomTree LargeCap will offset losses from the drop in WisdomTree LargeCap's long position.| HUMANA vs. Iridium Communications | HUMANA vs. Barrick Gold Corp | HUMANA vs. Sun Peak Metals | HUMANA vs. Pinterest |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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