Correlation Between HUMANA and Nuveen Core

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

By analyzing existing cross correlation between HUMANA INC and Nuveen Core Plus, you can compare the effects of market volatilities on HUMANA and Nuveen Core 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 Nuveen Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Nuveen Core.

Diversification Opportunities for HUMANA and Nuveen Core

0.75

Correlation Coefficient

HUMANA  Nuveen Core

Poor diversification

The 3 months correlation between HUMANA and Nuveen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Nuveen Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Core Plus 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 Nuveen Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Core Plus has no effect on the direction of HUMANA i.e., HUMANA and Nuveen Core go up and down completely randomly.

Pair Corralation between HUMANA and Nuveen Core

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Nuveen Core. In addition to that, HUMANA is 1.32 times more volatile than Nuveen Core Plus. It trades about -0.06 of its total potential returns per unit of risk. Nuveen Core Plus is currently generating about 0.02 per unit of volatility. If you would invest  1,100  in Nuveen Core Plus on December 2, 2024 and sell it today you would earn a total of  8.00  from holding Nuveen Core Plus or generate 0.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

HUMANA INC  vs.  Nuveen Core Plus

HUMANA INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Core Plus

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Core Plus are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Nuveen Core is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HUMANA and Nuveen Core

The main advantage of trading using opposite HUMANA and Nuveen Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Nuveen Core 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 Nuveen Core will offset losses from the drop in Nuveen Core's long position.

The idea behind HUMANA INC and Nuveen Core Plus 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.