Correlation Between Humana and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Humana and Franklin FTSE 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 Humana and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Franklin FTSE Asia, you can compare the effects of market volatilities on Humana and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Franklin FTSE.
Diversification Opportunities for Humana and Franklin FTSE
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Humana and Franklin is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Franklin FTSE Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Asia 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Asia has no effect on the direction of Humana i.e., Humana and Franklin FTSE go up and down completely randomly.
Pair Corralation between Humana and Franklin FTSE
Considering the 90-day investment horizon Humana Inc is expected to under-perform the Franklin FTSE. In addition to that, Humana is 2.09 times more volatile than Franklin FTSE Asia. It trades about -0.04 of its total potential returns per unit of risk. Franklin FTSE Asia is currently generating about 0.04 per unit of volatility. If you would invest 1,979 in Franklin FTSE Asia on August 28, 2024 and sell it today you would earn a total of 359.00 from holding Franklin FTSE Asia or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Franklin FTSE Asia
Performance |
| Timeline |
| Humana Inc |
| Franklin FTSE Asia |
Humana and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Franklin FTSE
The main advantage of trading using opposite Humana and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
| Franklin FTSE vs. Matthews China Active | Franklin FTSE vs. MAYBANK EMERGING ETF | Franklin FTSE vs. Matthews Emerging Markets | Franklin FTSE vs. JP Morgan Exchange Traded |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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