Correlation Between HUMANA and Franklin Low
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By analyzing existing cross correlation between HUMANA INC and Franklin Low Duration, you can compare the effects of market volatilities on HUMANA and Franklin Low 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 Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Franklin Low.
Diversification Opportunities for HUMANA and Franklin Low
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUMANA and Franklin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Franklin Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Low Duration 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 Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Low Duration has no effect on the direction of HUMANA i.e., HUMANA and Franklin Low go up and down completely randomly.
Pair Corralation between HUMANA and Franklin Low
Assuming the 90 days trading horizon HUMANA is expected to generate 1.71 times less return on investment than Franklin Low. In addition to that, HUMANA is 4.15 times more volatile than Franklin Low Duration. It trades about 0.02 of its total potential returns per unit of risk. Franklin Low Duration is currently generating about 0.17 per unit of volatility. If you would invest 838.00 in Franklin Low Duration on August 29, 2024 and sell it today you would earn a total of 63.00 from holding Franklin Low Duration or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.12% |
| Values | Daily Returns |
HUMANA INC vs. Franklin Low Duration
Performance |
| Timeline |
| HUMANA INC |
| Franklin Low Duration |
HUMANA and Franklin Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Franklin Low
The main advantage of trading using opposite HUMANA and Franklin Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Franklin Low 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 Low will offset losses from the drop in Franklin Low's long position.The idea behind HUMANA INC and Franklin Low Duration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Franklin Low vs. Permanent Portfolio Class | Franklin Low vs. HUMANA INC | Franklin Low vs. Aquagold International | Franklin Low vs. Barloworld Ltd ADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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