Correlation Between Victory Floating and HUMANA

Can any of the company-specific risk be diversified away by investing in both Victory Floating 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 Victory Floating and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Victory Floating Rate and HUMANA INC, you can compare the effects of market volatilities on Victory Floating 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 Victory Floating with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Floating and HUMANA.

Diversification Opportunities for Victory Floating and HUMANA

-0.28

Correlation Coefficient

Victory Floating  HUMANA

Very good diversification

The 3 months correlation between Victory and HUMANA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Victory Floating Rate and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Victory Floating 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 Victory Floating Rate 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 Victory Floating i.e., Victory Floating and HUMANA go up and down completely randomly.

Pair Corralation between Victory Floating and HUMANA

Assuming the 90 days horizon Victory Floating is expected to generate 1569.0 times less return on investment than HUMANA. But when comparing it to its historical volatility, Victory Floating Rate is 12.22 times less risky than HUMANA. It trades about 0.0 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  8,197  in HUMANA INC on October 9, 2024 and sell it today you would earn a total of  247.00  from holding HUMANA INC or generate 3.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Victory Floating Rate  vs.  HUMANA INC

Victory Floating Rate

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Floating Rate are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Victory Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HUMANA INC

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory Floating and HUMANA

The main advantage of trading using opposite Victory Floating and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Floating 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 Victory Floating Rate 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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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.