Correlation Between HUMANA and Invesco NASDAQ
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By analyzing existing cross correlation between HUMANA INC and Invesco NASDAQ Internet, you can compare the effects of market volatilities on HUMANA and Invesco NASDAQ 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 Invesco NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Invesco NASDAQ.
Diversification Opportunities for HUMANA and Invesco NASDAQ
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HUMANA and Invesco is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Invesco NASDAQ Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco NASDAQ Internet 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 Invesco NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco NASDAQ Internet has no effect on the direction of HUMANA i.e., HUMANA and Invesco NASDAQ go up and down completely randomly.
Pair Corralation between HUMANA and Invesco NASDAQ
Assuming the 90 days trading horizon HUMANA INC is expected to generate 62.95 times more return on investment than Invesco NASDAQ. However, HUMANA is 62.95 times more volatile than Invesco NASDAQ Internet. It trades about 0.07 of its potential returns per unit of risk. Invesco NASDAQ Internet is currently generating about 0.12 per unit of risk. If you would invest 8,028 in HUMANA INC on August 30, 2024 and sell it today you would lose (333.00) from holding HUMANA INC or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.74% |
| Values | Daily Returns |
HUMANA INC vs. Invesco NASDAQ Internet
Performance |
| Timeline |
| HUMANA INC |
| Invesco NASDAQ Internet |
HUMANA and Invesco NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Invesco NASDAQ
The main advantage of trading using opposite HUMANA and Invesco NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Invesco NASDAQ 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 Invesco NASDAQ will offset losses from the drop in Invesco NASDAQ's long position.The idea behind HUMANA INC and Invesco NASDAQ Internet 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.| Invesco NASDAQ vs. First Trust Dow | Invesco NASDAQ vs. First Trust NASDAQ 100 Technology | Invesco NASDAQ vs. Global X Social | Invesco NASDAQ vs. Invesco SP SmallCap |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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