Correlation Between HUMANA and Nuveen Mid

Can any of the company-specific risk be diversified away by investing in both HUMANA and Nuveen Mid 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 Mid 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 Mid Cap, you can compare the effects of market volatilities on HUMANA and Nuveen Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Nuveen Mid.

Diversification Opportunities for HUMANA and Nuveen Mid

-0.41

Correlation Coefficient

HUMANA  Nuveen Mid

Very good diversification

The 3 months correlation between HUMANA and Nuveen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Nuveen Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Mid Cap has no effect on the direction of HUMANA i.e., HUMANA and Nuveen Mid go up and down completely randomly.

Pair Corralation between HUMANA and Nuveen Mid

Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Nuveen Mid. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.72 times less risky than Nuveen Mid. The bond trades about -0.06 of its potential returns per unit of risk. The Nuveen Mid Cap is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  5,789  in Nuveen Mid Cap on August 30, 2024 and sell it today you would earn a total of  382.00  from holding Nuveen Mid Cap or generate 6.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	86.36%
Values	Daily Returns

HUMANA INC  vs.  Nuveen Mid Cap

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 unfluctuating 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.

Nuveen Mid Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Mid Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Nuveen Mid may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with HUMANA and Nuveen Mid

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

The idea behind HUMANA INC and Nuveen Mid Cap 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.