Correlation Between HUMANA and Vanguard Intermediate
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By analyzing existing cross correlation between HUMANA INC and Vanguard Intermediate Term Tax Exempt, you can compare the effects of market volatilities on HUMANA and Vanguard Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Vanguard Intermediate.
Diversification Opportunities for HUMANA and Vanguard Intermediate
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HUMANA and Vanguard is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Vanguard Intermediate Term Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of HUMANA i.e., HUMANA and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between HUMANA and Vanguard Intermediate
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Vanguard Intermediate. In addition to that, HUMANA is 3.66 times more volatile than Vanguard Intermediate Term Tax Exempt. It trades about -0.02 of its total potential returns per unit of risk. Vanguard Intermediate Term Tax Exempt is currently generating about 0.09 per unit of volatility. If you would invest 1,321 in Vanguard Intermediate Term Tax Exempt on September 2, 2024 and sell it today you would earn a total of 53.00 from holding Vanguard Intermediate Term Tax Exempt or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
HUMANA INC vs. Vanguard Intermediate Term Tax
Performance |
| Timeline |
| HUMANA INC |
| Vanguard Intermediate |
HUMANA and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Vanguard Intermediate
The main advantage of trading using opposite HUMANA and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Vanguard Intermediate 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 Intermediate will offset losses from the drop in Vanguard Intermediate's long position.The idea behind HUMANA INC and Vanguard Intermediate Term Tax Exempt 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.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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