Correlation Between HUMANA and Prudential Short
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By analyzing existing cross correlation between HUMANA INC and Prudential Short Duration, you can compare the effects of market volatilities on HUMANA and Prudential Short 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 Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Prudential Short.
Diversification Opportunities for HUMANA and Prudential Short
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Prudential is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Duration 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 Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of HUMANA i.e., HUMANA and Prudential Short go up and down completely randomly.
Pair Corralation between HUMANA and Prudential Short
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Prudential Short. In addition to that, HUMANA is 4.58 times more volatile than Prudential Short Duration. It trades about -0.07 of its total potential returns per unit of risk. Prudential Short Duration is currently generating about 0.11 per unit of volatility. If you would invest 841.00 in Prudential Short Duration on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Prudential Short Duration or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
HUMANA INC vs. Prudential Short Duration
Performance |
| Timeline |
| HUMANA INC |
| Prudential Short Duration |
HUMANA and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Prudential Short
The main advantage of trading using opposite HUMANA and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Prudential Short 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 Prudential Short will offset losses from the drop in Prudential Short's long position.The idea behind HUMANA INC and Prudential Short Duration 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.| Prudential Short vs. Prudential High Yield | Prudential Short vs. HUMANA INC | Prudential Short vs. Aquagold International | Prudential Short vs. Barloworld Ltd ADR |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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