Correlation Between HUMANA and Small-company Stock
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By analyzing existing cross correlation between HUMANA INC and Small Company Stock Fund, you can compare the effects of market volatilities on HUMANA and Small-company Stock 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-company Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Small-company Stock.
Diversification Opportunities for HUMANA and Small-company Stock
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Small-company is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Small Company Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small-company Stock 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-company Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small-company Stock has no effect on the direction of HUMANA i.e., HUMANA and Small-company Stock go up and down completely randomly.
Pair Corralation between HUMANA and Small-company Stock
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Small-company Stock. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.38 times less risky than Small-company Stock. The bond trades about -0.22 of its potential returns per unit of risk. The Small Company Stock Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,753 in Small Company Stock Fund on August 30, 2024 and sell it today you would earn a total of 215.00 from holding Small Company Stock Fund or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
HUMANA INC vs. Small Company Stock Fund
Performance |
| Timeline |
| HUMANA INC |
| Small-company Stock |
HUMANA and Small-company Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Small-company Stock
The main advantage of trading using opposite HUMANA and Small-company Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Small-company Stock 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-company Stock will offset losses from the drop in Small-company Stock's long position.The idea behind HUMANA INC and Small Company Stock Fund 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-company Stock vs. Vanguard Small Cap Index | Small-company Stock vs. T Rowe Price | Small-company Stock vs. HUMANA INC | Small-company Stock vs. Aquagold International |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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