Correlation Between HUMANA and Capital World
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By analyzing existing cross correlation between HUMANA INC and Capital World Bond, you can compare the effects of market volatilities on HUMANA and Capital World 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 World. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Capital World.
Diversification Opportunities for HUMANA and Capital World
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HUMANA and Capital is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of HUMANA i.e., HUMANA and Capital World go up and down completely randomly.
Pair Corralation between HUMANA and Capital World
Assuming the 90 days trading horizon HUMANA is expected to generate 2.81 times less return on investment than Capital World. In addition to that, HUMANA is 1.57 times more volatile than Capital World Bond. It trades about 0.02 of its total potential returns per unit of risk. Capital World Bond is currently generating about 0.07 per unit of volatility. If you would invest 1,503 in Capital World Bond on September 1, 2024 and sell it today you would earn a total of 117.00 from holding Capital World Bond or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.77% |
| Values | Daily Returns |
HUMANA INC vs. Capital World Bond
Performance |
| Timeline |
| HUMANA INC |
| Capital World Bond |
HUMANA and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Capital World
The main advantage of trading using opposite HUMANA and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Capital World 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 World will offset losses from the drop in Capital World's long position.| HUMANA vs. NI Holdings | HUMANA vs. Naked Wines plc | HUMANA vs. Kinsale Capital Group | HUMANA vs. Diageo PLC ADR |
| Capital World vs. Dreyfus Natural Resources | Capital World vs. Jennison Natural Resources | Capital World vs. Fidelity Advisor Energy | Capital World vs. Energy Services Fund |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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