Correlation Between Humana and PIMCO 1
Can any of the company-specific risk be diversified away by investing in both Humana and PIMCO 1 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 Humana and PIMCO 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and PIMCO 1 5 Year, you can compare the effects of market volatilities on Humana and PIMCO 1 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 PIMCO 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and PIMCO 1.
Diversification Opportunities for Humana and PIMCO 1
Excellent diversification
The 3 months correlation between Humana and PIMCO is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and PIMCO 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO 1 5 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 PIMCO 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO 1 5 has no effect on the direction of Humana i.e., Humana and PIMCO 1 go up and down completely randomly.
Pair Corralation between Humana and PIMCO 1
Considering the 90-day investment horizon Humana Inc is expected to generate 11.39 times more return on investment than PIMCO 1. However, Humana is 11.39 times more volatile than PIMCO 1 5 Year. It trades about 0.06 of its potential returns per unit of risk. PIMCO 1 5 Year is currently generating about 0.12 per unit of risk. If you would invest 31,700 in Humana Inc on February 6, 2024 and sell it today you would earn a total of 518.00 from holding Humana Inc or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Humana Inc vs. PIMCO 1 5 Year
Performance |
Timeline |
Humana Inc |
PIMCO 1 5 |
Humana and PIMCO 1 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Humana and PIMCO 1
The main advantage of trading using opposite Humana and PIMCO 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, PIMCO 1 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 PIMCO 1 will offset losses from the drop in PIMCO 1's long position.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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