Correlation Between Vanguard Wellesley and HUMANA
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By analyzing existing cross correlation between Vanguard Wellesley Income and HUMANA INC, you can compare the effects of market volatilities on Vanguard Wellesley 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 Wellesley with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Wellesley and HUMANA.
Diversification Opportunities for Vanguard Wellesley and HUMANA
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and HUMANA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Wellesley Income and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Vanguard Wellesley 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 Wellesley Income 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 Wellesley i.e., Vanguard Wellesley and HUMANA go up and down completely randomly.
Pair Corralation between Vanguard Wellesley and HUMANA
Assuming the 90 days horizon Vanguard Wellesley Income is expected to under-perform the HUMANA. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Wellesley Income is 1.33 times less risky than HUMANA. The mutual fund trades about -0.06 of its potential returns per unit of risk. The HUMANA INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,111 in HUMANA INC on October 26, 2024 and sell it today you would earn a total of 333.00 from holding HUMANA INC or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Wellesley Income vs. HUMANA INC
Performance |
| Timeline |
| Vanguard Wellesley Income |
| HUMANA INC |
Vanguard Wellesley and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Wellesley and HUMANA
The main advantage of trading using opposite Vanguard Wellesley and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Wellesley 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 Wellesley vs. Vanguard Wellington Fund | Vanguard Wellesley vs. Vanguard Balanced Index | Vanguard Wellesley vs. Vanguard Wellesley Income | Vanguard Wellesley vs. Vanguard Dividend Growth |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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