Correlation Between Axon Enterprise and Humana
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise and Humana at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Axon Enterprise and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and Humana Inc, you can compare the effects of market volatilities on Axon Enterprise 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 Axon Enterprise with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and Humana.
Diversification Opportunities for Axon Enterprise and Humana
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axon and Humana is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Axon Enterprise 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 Axon Enterprise 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 Axon Enterprise i.e., Axon Enterprise and Humana go up and down completely randomly.
Pair Corralation between Axon Enterprise and Humana
Assuming the 90 days trading horizon Axon Enterprise is expected to generate 2.08 times more return on investment than Humana. However, Axon Enterprise is 2.08 times more volatile than Humana Inc. It trades about 0.28 of its potential returns per unit of risk. Humana Inc is currently generating about 0.23 per unit of risk. If you would invest 44,586 in Axon Enterprise on August 30, 2024 and sell it today you would earn a total of 18,688 from holding Axon Enterprise or generate 41.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axon Enterprise vs. Humana Inc
Performance |
| Timeline |
| Axon Enterprise |
| Humana Inc |
Axon Enterprise and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axon Enterprise and Humana
The main advantage of trading using opposite Axon Enterprise and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise 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.| Axon Enterprise vs. Lendinvest PLC | Axon Enterprise vs. Neometals | Axon Enterprise vs. Albion Technology General | Axon Enterprise vs. Jupiter Fund Management |
| Humana vs. Lendinvest PLC | Humana vs. Neometals | Humana vs. Albion Technology General | Humana vs. Jupiter Fund Management |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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