Correlation Between HUMANA and Franklin Balance
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By analyzing existing cross correlation between HUMANA INC and Franklin Balance Sheet, you can compare the effects of market volatilities on HUMANA and Franklin Balance 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 Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Franklin Balance.
Diversification Opportunities for HUMANA and Franklin Balance
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HUMANA and Franklin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Franklin Balance Sheet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Balance Sheet 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 Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Balance Sheet has no effect on the direction of HUMANA i.e., HUMANA and Franklin Balance go up and down completely randomly.
Pair Corralation between HUMANA and Franklin Balance
Assuming the 90 days trading horizon HUMANA INC is expected to generate 86.83 times more return on investment than Franklin Balance. However, HUMANA is 86.83 times more volatile than Franklin Balance Sheet. It trades about 0.07 of its potential returns per unit of risk. Franklin Balance Sheet is currently generating about 0.05 per unit of risk. If you would invest 8,081 in HUMANA INC on August 29, 2024 and sell it today you would lose (46.00) from holding HUMANA INC or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.55% |
| Values | Daily Returns |
HUMANA INC vs. Franklin Balance Sheet
Performance |
| Timeline |
| HUMANA INC |
| Franklin Balance Sheet |
HUMANA and Franklin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Franklin Balance
The main advantage of trading using opposite HUMANA and Franklin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Franklin Balance 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 Balance will offset losses from the drop in Franklin Balance's long position.The idea behind HUMANA INC and Franklin Balance Sheet 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 Balance vs. Vanguard Mid Cap Value | Franklin Balance vs. HUMANA INC | Franklin Balance vs. Aquagold International | Franklin Balance 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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