Correlation Between Tiaa-cref Mid-cap and HUMANA

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

By analyzing existing cross correlation between Tiaa Cref Mid Cap Value and HUMANA INC, you can compare the effects of market volatilities on Tiaa-cref Mid-cap 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 Tiaa-cref Mid-cap with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Mid-cap and HUMANA.

Diversification Opportunities for Tiaa-cref Mid-cap and HUMANA

-0.11

Correlation Coefficient

Tiaa-cref Mid-cap  HUMANA

Good diversification

The 3 months correlation between Tiaa-cref and HUMANA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Mid Cap Value and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Tiaa-cref Mid-cap 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 Tiaa Cref Mid Cap Value 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 Tiaa-cref Mid-cap i.e., Tiaa-cref Mid-cap and HUMANA go up and down completely randomly.

Pair Corralation between Tiaa-cref Mid-cap and HUMANA

Assuming the 90 days horizon Tiaa Cref Mid Cap Value is expected to generate 1.26 times more return on investment than HUMANA. However, Tiaa-cref Mid-cap is 1.26 times more volatile than HUMANA INC. It trades about 0.05 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.02 per unit of risk. If you would invest  1,733  in Tiaa Cref Mid Cap Value on March 13, 2024 and sell it today you would earn a total of  37.00  from holding Tiaa Cref Mid Cap Value or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Tiaa Cref Mid Cap Value  vs.  HUMANA INC

Tiaa-cref Mid-cap

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Mid Cap Value are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Tiaa-cref Mid-cap 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

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 1 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tiaa-cref Mid-cap and HUMANA

The main advantage of trading using opposite Tiaa-cref Mid-cap and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Mid-cap 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 Tiaa Cref Mid Cap Value 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.