Correlation Between Vanguard Total and Humana
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Humana at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Total and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Humana Inc, you can compare the effects of market volatilities on Vanguard Total 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 Total with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Humana.
Diversification Opportunities for Vanguard Total and Humana
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Humana is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Vanguard Total 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 Total Stock 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 Total i.e., Vanguard Total and Humana go up and down completely randomly.
Pair Corralation between Vanguard Total and Humana
Considering the 90-day investment horizon Vanguard Total is expected to generate 3.9 times less return on investment than Humana. But when comparing it to its historical volatility, Vanguard Total Stock is 3.56 times less risky than Humana. It trades about 0.19 of its potential returns per unit of risk. Humana Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 25,777 in Humana Inc on August 30, 2024 and sell it today you would earn a total of 3,891 from holding Humana Inc or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Humana Inc
Performance |
| Timeline |
| Vanguard Total Stock |
| Humana Inc |
Vanguard Total and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Humana
The main advantage of trading using opposite Vanguard Total and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |