Correlation Between Vanguard Financials and HUMANA
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By analyzing existing cross correlation between Vanguard Financials Index and HUMANA INC, you can compare the effects of market volatilities on Vanguard Financials and HUMANA 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 Vanguard Financials with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Financials and HUMANA.
Diversification Opportunities for Vanguard Financials and HUMANA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and HUMANA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Financials Index and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Vanguard Financials 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 Vanguard Financials Index are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Vanguard Financials i.e., Vanguard Financials and HUMANA go up and down completely randomly.
Pair Corralation between Vanguard Financials and HUMANA
Assuming the 90 days horizon Vanguard Financials Index is expected to generate 0.79 times more return on investment than HUMANA. However, Vanguard Financials Index is 1.27 times less risky than HUMANA. It trades about -0.1 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.09 per unit of risk. If you would invest 6,287 in Vanguard Financials Index on November 27, 2024 and sell it today you would lose (100.00) from holding Vanguard Financials Index or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vanguard Financials Index vs. HUMANA INC
Performance |
| Timeline |
| Vanguard Financials Index |
| HUMANA INC |
Vanguard Financials and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Financials and HUMANA
The main advantage of trading using opposite Vanguard Financials and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Financials position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.The idea behind Vanguard Financials Index and HUMANA INC 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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