Correlation Between HUMANA and Wasatch Micro
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By analyzing existing cross correlation between HUMANA INC and Wasatch Micro Cap, you can compare the effects of market volatilities on HUMANA and Wasatch Micro 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 Wasatch Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Wasatch Micro.
Diversification Opportunities for HUMANA and Wasatch Micro
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Wasatch is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Wasatch Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch 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 Wasatch Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Micro Cap has no effect on the direction of HUMANA i.e., HUMANA and Wasatch Micro go up and down completely randomly.
Pair Corralation between HUMANA and Wasatch Micro
Assuming the 90 days trading horizon HUMANA INC is expected to generate 69.07 times more return on investment than Wasatch Micro. However, HUMANA is 69.07 times more volatile than Wasatch Micro Cap. It trades about 0.07 of its potential returns per unit of risk. Wasatch Micro Cap is currently generating about 0.08 per unit of risk. If you would invest 8,028 in HUMANA INC on August 30, 2024 and sell it today you would lose (333.00) from holding HUMANA INC or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.74% |
| Values | Daily Returns |
HUMANA INC vs. Wasatch Micro Cap
Performance |
| Timeline |
| HUMANA INC |
| Wasatch Micro Cap |
HUMANA and Wasatch Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Wasatch Micro
The main advantage of trading using opposite HUMANA and Wasatch Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Wasatch Micro 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 Wasatch Micro will offset losses from the drop in Wasatch Micro's long position.The idea behind HUMANA INC and Wasatch Micro 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.| Wasatch Micro vs. Putnam Equity Income | Wasatch Micro vs. Putnam Growth Opportunities | Wasatch Micro vs. HUMANA INC | Wasatch Micro 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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