Correlation Between MicroSectors FANG and HUMANA
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By analyzing existing cross correlation between MicroSectors FANG Index and HUMANA INC, you can compare the effects of market volatilities on MicroSectors FANG 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 MicroSectors FANG with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and HUMANA.
Diversification Opportunities for MicroSectors FANG and HUMANA
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between MicroSectors and HUMANA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and MicroSectors FANG 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 MicroSectors FANG Index 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 MicroSectors FANG i.e., MicroSectors FANG and HUMANA go up and down completely randomly.
Pair Corralation between MicroSectors FANG and HUMANA
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the HUMANA. In addition to that, MicroSectors FANG is 1.61 times more volatile than HUMANA INC. It trades about -0.18 of its total potential returns per unit of risk. HUMANA INC is currently generating about 0.14 per unit of volatility. If you would invest 7,965 in HUMANA INC on January 20, 2024 and sell it today you would earn a total of 447.00 from holding HUMANA INC or generate 5.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 91.3% |
Values | Daily Returns |
MicroSectors FANG Index vs. HUMANA INC
Performance |
Timeline |
MicroSectors FANG Index |
HUMANA INC |
MicroSectors FANG and HUMANA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MicroSectors FANG and HUMANA
The main advantage of trading using opposite MicroSectors FANG and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG 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.MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. MicroSectors Solactive FANG | MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Technology |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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