Correlation Between HUMANA and Small Cap
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By analyzing existing cross correlation between HUMANA INC and Small Cap Core, 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
Excellent diversification
The 3 months correlation between HUMANA and Small is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core 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 Core 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 INC is expected to generate 64.53 times more return on investment than Small Cap. However, HUMANA is 64.53 times more volatile than Small Cap Core. It trades about 0.07 of its potential returns per unit of risk. Small Cap Core is currently generating about 0.05 per unit of risk. If you would invest 8,033 in HUMANA INC on August 23, 2024 and sell it today you would earn a total of 2.00 from holding HUMANA INC or generate 0.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.94% |
| Values | Daily Returns |
HUMANA INC vs. Small Cap Core
Performance |
| Timeline |
| HUMANA INC |
| Small Cap Core |
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.| HUMANA vs. Western Digital | HUMANA vs. Arrow Electronics | HUMANA vs. Anheuser Busch Inbev | HUMANA vs. Keurig Dr Pepper |
| Small Cap vs. Vanguard Mid Cap Index | Small Cap vs. Vanguard Total Bond | Small Cap vs. Vanguard Institutional Index | Small Cap vs. Vanguard Total 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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