Correlation Between HUMANA and Nationwide Ziegler

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

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

Diversification Opportunities for HUMANA and Nationwide Ziegler

-0.5

Correlation Coefficient

HUMANA  Nationwide Ziegler

Very good diversification

The 3 months correlation between HUMANA and Nationwide is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Nationwide Ziegler Nyse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Ziegler Nyse 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 Nationwide Ziegler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Ziegler Nyse has no effect on the direction of HUMANA i.e., HUMANA and Nationwide Ziegler go up and down completely randomly.

Pair Corralation between HUMANA and Nationwide Ziegler

Assuming the 90 days trading horizon HUMANA INC is expected to generate 76.68 times more return on investment than Nationwide Ziegler. However, HUMANA is 76.68 times more volatile than Nationwide Ziegler Nyse. It trades about 0.08 of its potential returns per unit of risk. Nationwide Ziegler Nyse is currently generating about 0.09 per unit of risk. If you would invest  7,917  in HUMANA INC on August 31, 2024 and sell it today you would lose (222.00) from holding HUMANA INC or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.06%
Values	Daily Returns

HUMANA INC  vs.  Nationwide Ziegler Nyse

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 unsteady 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.

Nationwide Ziegler Nyse

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Ziegler Nyse are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Nationwide Ziegler is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUMANA and Nationwide Ziegler

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

The idea behind HUMANA INC and Nationwide Ziegler Nyse 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.