Correlation Between HUMANA and Meridian Small
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By analyzing existing cross correlation between HUMANA INC and Meridian Small Cap, you can compare the effects of market volatilities on HUMANA and Meridian 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 Meridian Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Meridian Small.
Diversification Opportunities for HUMANA and Meridian Small
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Meridian is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Meridian Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian 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 Meridian Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Small Cap has no effect on the direction of HUMANA i.e., HUMANA and Meridian Small go up and down completely randomly.
Pair Corralation between HUMANA and Meridian Small
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Meridian Small. In addition to that, HUMANA is 1.48 times more volatile than Meridian Small Cap. It trades about -0.19 of its total potential returns per unit of risk. Meridian Small Cap is currently generating about 0.03 per unit of volatility. If you would invest 1,211 in Meridian Small Cap on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Meridian Small Cap or generate 0.5% 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. Meridian Small Cap
Performance |
| Timeline |
| HUMANA INC |
| Meridian Small Cap |
HUMANA and Meridian Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Meridian Small
The main advantage of trading using opposite HUMANA and Meridian Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Meridian 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 Meridian Small will offset losses from the drop in Meridian Small's long position.| HUMANA vs. Morgan Stanley | HUMANA vs. Infosys Ltd ADR | HUMANA vs. Citizens Bancorp Investment | HUMANA vs. Small Cap Premium |
| Meridian Small vs. Meridian Small Cap | Meridian Small vs. Meridian Small Cap | Meridian Small vs. Emerald Banking And | Meridian Small vs. Fidelity Small Cap |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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