Correlation Between HUMANA and Wells Fargo
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By analyzing existing cross correlation between HUMANA INC and Wells Fargo Large, you can compare the effects of market volatilities on HUMANA and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Wells Fargo.
Diversification Opportunities for HUMANA and Wells Fargo
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Wells is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Wells Fargo Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Large 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Large has no effect on the direction of HUMANA i.e., HUMANA and Wells Fargo go up and down completely randomly.
Pair Corralation between HUMANA and Wells Fargo
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Wells Fargo. In addition to that, HUMANA is 1.02 times more volatile than Wells Fargo Large. It trades about -0.21 of its total potential returns per unit of risk. Wells Fargo Large is currently generating about 0.12 per unit of volatility. If you would invest 3,331 in Wells Fargo Large on August 31, 2024 and sell it today you would earn a total of 92.00 from holding Wells Fargo Large or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
HUMANA INC vs. Wells Fargo Large
Performance |
| Timeline |
| HUMANA INC |
| Wells Fargo Large |
HUMANA and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Wells Fargo
The main advantage of trading using opposite HUMANA and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| HUMANA vs. Air Products and | HUMANA vs. GE Vernova LLC | HUMANA vs. Aris Water Solutions | HUMANA vs. Pure Cycle |
| Wells Fargo vs. Europacific Growth Fund | Wells Fargo vs. Washington Mutual Investors | Wells Fargo vs. Capital World Growth | Wells Fargo vs. HUMANA INC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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