Correlation Between HUMANA and Paradigm Micro-cap
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By analyzing existing cross correlation between HUMANA INC and Paradigm Micro Cap Fund, you can compare the effects of market volatilities on HUMANA and Paradigm Micro-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 Paradigm Micro-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Paradigm Micro-cap.
Diversification Opportunities for HUMANA and Paradigm Micro-cap
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Paradigm is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Paradigm Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm Micro 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 Paradigm Micro-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm Micro Cap has no effect on the direction of HUMANA i.e., HUMANA and Paradigm Micro-cap go up and down completely randomly.
Pair Corralation between HUMANA and Paradigm Micro-cap
Assuming the 90 days trading horizon HUMANA INC is expected to generate 59.79 times more return on investment than Paradigm Micro-cap. However, HUMANA is 59.79 times more volatile than Paradigm Micro Cap Fund. It trades about 0.07 of its potential returns per unit of risk. Paradigm Micro Cap Fund is currently generating about 0.05 per unit of risk. If you would invest 8,081 in HUMANA INC on August 29, 2024 and sell it today you would lose (46.00) from holding HUMANA INC or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.55% |
| Values | Daily Returns |
HUMANA INC vs. Paradigm Micro Cap Fund
Performance |
| Timeline |
| HUMANA INC |
| Paradigm Micro Cap |
HUMANA and Paradigm Micro-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Paradigm Micro-cap
The main advantage of trading using opposite HUMANA and Paradigm Micro-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Paradigm Micro-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 Paradigm Micro-cap will offset losses from the drop in Paradigm Micro-cap's long position.The idea behind HUMANA INC and Paradigm Micro Cap 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.| Paradigm Micro-cap vs. Vanguard Small Cap Index | Paradigm Micro-cap vs. T Rowe Price | Paradigm Micro-cap vs. HUMANA INC | Paradigm Micro-cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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