Correlation Between Lyxor 1 and Humana
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 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 Lyxor 1 and Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Humana Inc, you can compare the effects of market volatilities on Lyxor 1 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 Lyxor 1 with a short position of Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Humana.
Diversification Opportunities for Lyxor 1 and Humana
Good diversification
The 3 months correlation between Lyxor and Humana is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc and Lyxor 1 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 Lyxor 1 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 Lyxor 1 i.e., Lyxor 1 and Humana go up and down completely randomly.
Pair Corralation between Lyxor 1 and Humana
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.4 times more return on investment than Humana. However, Lyxor 1 is 2.48 times less risky than Humana. It trades about 0.01 of its potential returns per unit of risk. Humana Inc is currently generating about -0.04 per unit of risk. If you would invest 2,465 in Lyxor 1 on January 17, 2025 and sell it today you would earn a total of 34.00 from holding Lyxor 1 or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. Humana Inc
Performance |
| Timeline |
| Lyxor 1 |
| Humana Inc |
Lyxor 1 and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Humana
The main advantage of trading using opposite Lyxor 1 and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 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.| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor Index Fund | Lyxor 1 vs. Lyxor 1 TecDAX |
| Humana vs. American Homes 4 | Humana vs. Scandic Hotels Group | Humana vs. HYATT HOTELS A | Humana vs. DFS Furniture PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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