Correlation Between Humana and Pacer Small
Can any of the company-specific risk be diversified away by investing in both Humana and Pacer Small 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 Pacer Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Pacer Small Cap, you can compare the effects of market volatilities on Humana and Pacer Small 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 Pacer Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Pacer Small.
Diversification Opportunities for Humana and Pacer Small
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Pacer is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Pacer Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Small 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 Pacer Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Small Cap has no effect on the direction of Humana i.e., Humana and Pacer Small go up and down completely randomly.
Pair Corralation between Humana and Pacer Small
Considering the 90-day investment horizon Humana Inc is expected to generate 2.09 times more return on investment than Pacer Small. However, Humana is 2.09 times more volatile than Pacer Small Cap. It trades about 0.21 of its potential returns per unit of risk. Pacer Small Cap is currently generating about 0.25 per unit of risk. If you would invest 25,777 in Humana Inc on August 30, 2024 and sell it today you would earn a total of 3,891 from holding Humana Inc or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Pacer Small Cap
Performance |
| Timeline |
| Humana Inc |
| Pacer Small Cap |
Humana and Pacer Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Pacer Small
The main advantage of trading using opposite Humana and Pacer Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Pacer Small 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 Pacer Small will offset losses from the drop in Pacer Small's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Pacer Small vs. Pacer Large Cap | Pacer Small vs. VanEck Robotics ETF | Pacer Small vs. Pacer Small Cap | Pacer Small vs. Pacer Cash Cows |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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