Correlation Between Small Cap and HUMANA
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By analyzing existing cross correlation between Small Cap Growth and HUMANA INC, you can compare the effects of market volatilities on Small Cap and HUMANA 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 Small Cap with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and HUMANA.
Diversification Opportunities for Small Cap and HUMANA
Modest diversification
The 3 months correlation between Small and HUMANA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Growth and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Small Cap 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 Small Cap Growth are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Small Cap i.e., Small Cap and HUMANA go up and down completely randomly.
Pair Corralation between Small Cap and HUMANA
Assuming the 90 days horizon Small Cap Growth is expected to under-perform the HUMANA. But the mutual fund apears to be less risky and, when comparing its historical volatility, Small Cap Growth is 1.78 times less risky than HUMANA. The mutual fund trades about -0.24 of its potential returns per unit of risk. The HUMANA INC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,930 in HUMANA INC on February 1, 2024 and sell it today you would earn a total of 166.00 from holding HUMANA INC or generate 2.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 91.3% |
Values | Daily Returns |
Small Cap Growth vs. HUMANA INC
Performance |
Timeline |
Small Cap Growth |
HUMANA INC |
Small Cap and HUMANA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Small Cap and HUMANA
The main advantage of trading using opposite Small Cap and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.Small Cap vs. Focused Dynamic Growth | Small Cap vs. Heritage Fund Investor | Small Cap vs. Emerging Markets Fund | Small Cap vs. Small Cap Value |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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