Correlation Between HUMANA and Aqr Small
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By analyzing existing cross correlation between HUMANA INC and Aqr Small Cap, you can compare the effects of market volatilities on HUMANA and Aqr 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 Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Aqr Small.
Diversification Opportunities for HUMANA and Aqr Small
Excellent diversification
The 3 months correlation between HUMANA and Aqr is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr 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 Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of HUMANA i.e., HUMANA and Aqr Small go up and down completely randomly.
Pair Corralation between HUMANA and Aqr Small
Assuming the 90 days trading horizon HUMANA INC is expected to generate 56.61 times more return on investment than Aqr Small. However, HUMANA is 56.61 times more volatile than Aqr Small Cap. It trades about 0.07 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.06 per unit of risk. If you would invest 8,012 in HUMANA INC on September 2, 2024 and sell it today you would lose (317.00) from holding HUMANA INC or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.95% |
| Values | Daily Returns |
HUMANA INC vs. Aqr Small Cap
Performance |
| Timeline |
| HUMANA INC |
| Aqr Small Cap |
HUMANA and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Aqr Small
The main advantage of trading using opposite HUMANA and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Aqr 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 Aqr Small will offset losses from the drop in Aqr Small's long position.The idea behind HUMANA INC and Aqr Small Cap 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.| Aqr Small vs. Lgm Risk Managed | Aqr Small vs. Aqr Risk Balanced Modities | Aqr Small vs. Alliancebernstein Global High | Aqr Small vs. Artisan High Income |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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