Correlation Between HUMANA and Vanguard Total
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By analyzing existing cross correlation between HUMANA INC and Vanguard Total International, you can compare the effects of market volatilities on HUMANA and Vanguard Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Vanguard Total.
Diversification Opportunities for HUMANA and Vanguard Total
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between HUMANA and Vanguard is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Vanguard Total International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Inter 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Inter has no effect on the direction of HUMANA i.e., HUMANA and Vanguard Total go up and down completely randomly.
Pair Corralation between HUMANA and Vanguard Total
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Vanguard Total. In addition to that, HUMANA is 1.53 times more volatile than Vanguard Total International. It trades about -0.18 of its total potential returns per unit of risk. Vanguard Total International is currently generating about -0.03 per unit of volatility. If you would invest 14,018 in Vanguard Total International on September 2, 2024 and sell it today you would lose (78.00) from holding Vanguard Total International or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
HUMANA INC vs. Vanguard Total International
Performance |
| Timeline |
| HUMANA INC |
| Vanguard Total Inter |
HUMANA and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Vanguard Total
The main advantage of trading using opposite HUMANA and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.The idea behind HUMANA INC and Vanguard Total International 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 Total vs. Federated Institutional High | Vanguard Total vs. Needham Aggressive Growth | Vanguard Total vs. Ab Global Risk | Vanguard Total vs. California High Yield Municipal |
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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