Correlation Between HUMANA and Small Cap
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By analyzing existing cross correlation between HUMANA INC and Small Cap Equity, you can compare the effects of market volatilities on HUMANA and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Small Cap.
Diversification Opportunities for HUMANA and Small Cap
Very good diversification
The 3 months correlation between HUMANA and Small is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Equity 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Equity has no effect on the direction of HUMANA i.e., HUMANA and Small Cap go up and down completely randomly.
Pair Corralation between HUMANA and Small Cap
Assuming the 90 days trading horizon HUMANA is expected to generate 27.68 times less return on investment than Small Cap. But when comparing it to its historical volatility, HUMANA INC is 2.05 times less risky than Small Cap. It trades about 0.0 of its potential returns per unit of risk. Small Cap Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,131 in Small Cap Equity on September 12, 2024 and sell it today you would earn a total of 493.00 from holding Small Cap Equity or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.88% |
| Values | Daily Returns |
HUMANA INC vs. Small Cap Equity
Performance |
| Timeline |
| HUMANA INC |
| Small Cap Equity |
HUMANA and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Small Cap
The main advantage of trading using opposite HUMANA and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.The idea behind HUMANA INC and Small Cap Equity 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.| Small Cap vs. T Rowe Price | Small Cap vs. HUMANA INC | Small Cap vs. Aquagold International | Small Cap vs. Barloworld Ltd ADR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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