Correlation Between Vanguard High-yield and HUMANA
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By analyzing existing cross correlation between Vanguard High Yield Corporate and HUMANA INC, you can compare the effects of market volatilities on Vanguard High-yield 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 High-yield with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard High-yield and HUMANA.
Diversification Opportunities for Vanguard High-yield and HUMANA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and HUMANA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard High Yield Corporate and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Vanguard High-yield 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 High Yield Corporate 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 High-yield i.e., Vanguard High-yield and HUMANA go up and down completely randomly.
Pair Corralation between Vanguard High-yield and HUMANA
Assuming the 90 days horizon Vanguard High Yield Corporate is expected to generate 0.1 times more return on investment than HUMANA. However, Vanguard High Yield Corporate is 10.18 times less risky than HUMANA. It trades about 0.18 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.16 per unit of risk. If you would invest 545.00 in Vanguard High Yield Corporate on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Vanguard High Yield Corporate or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vanguard High Yield Corporate vs. HUMANA INC
Performance |
| Timeline |
| Vanguard High Yield |
| HUMANA INC |
Vanguard High-yield and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard High-yield and HUMANA
The main advantage of trading using opposite Vanguard High-yield and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard High-yield 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 High Yield Corporate 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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