Correlation Between HUMANA and Vanguard Financials
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By analyzing existing cross correlation between HUMANA INC and Vanguard Financials Index, you can compare the effects of market volatilities on HUMANA and Vanguard Financials 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 Vanguard Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Vanguard Financials.
Diversification Opportunities for HUMANA and Vanguard Financials
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Vanguard is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Vanguard Financials Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Financials Index 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 Vanguard Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Financials Index has no effect on the direction of HUMANA i.e., HUMANA and Vanguard Financials go up and down completely randomly.
Pair Corralation between HUMANA and Vanguard Financials
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Vanguard Financials. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 2.53 times less risky than Vanguard Financials. The bond trades about -0.07 of its potential returns per unit of risk. The Vanguard Financials Index is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5,756 in Vanguard Financials Index on August 29, 2024 and sell it today you would earn a total of 548.00 from holding Vanguard Financials Index or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
HUMANA INC vs. Vanguard Financials Index
Performance |
| Timeline |
| HUMANA INC |
| Vanguard Financials Index |
HUMANA and Vanguard Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Vanguard Financials
The main advantage of trading using opposite HUMANA and Vanguard Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Vanguard Financials 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 Vanguard Financials will offset losses from the drop in Vanguard Financials' long position.The idea behind HUMANA INC and Vanguard Financials Index 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.| Vanguard Financials vs. T Rowe Price | Vanguard Financials vs. Davis Financial Fund | Vanguard Financials vs. HUMANA INC | Vanguard Financials vs. Aquagold International |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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