Correlation Between HUMANA and VictoryShares Multi

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

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

Diversification Opportunities for HUMANA and VictoryShares Multi

-0.47

Correlation Coefficient

HUMANA  VictoryShares Multi

Very good diversification

The 3 months correlation between HUMANA and VictoryShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and VictoryShares Multi Factor Min in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Multi 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 VictoryShares Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Multi has no effect on the direction of HUMANA i.e., HUMANA and VictoryShares Multi go up and down completely randomly.

Pair Corralation between HUMANA and VictoryShares Multi

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the VictoryShares Multi. In addition to that, HUMANA is 1.37 times more volatile than VictoryShares Multi Factor Minimum. It trades about -0.18 of its total potential returns per unit of risk. VictoryShares Multi Factor Minimum is currently generating about 0.12 per unit of volatility. If you would invest  4,750  in VictoryShares Multi Factor Minimum on September 12, 2024 and sell it today you would earn a total of  216.00  from holding VictoryShares Multi Factor Minimum or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

HUMANA INC  vs.  VictoryShares Multi Factor Min

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

VictoryShares Multi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Multi Factor Minimum are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable primary indicators, VictoryShares Multi is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HUMANA and VictoryShares Multi

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

The idea behind HUMANA INC and VictoryShares Multi Factor Minimum 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.