Correlation Between HUMANA and Franklin Small
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By analyzing existing cross correlation between HUMANA INC and Franklin Small Cap, you can compare the effects of market volatilities on HUMANA and Franklin Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Franklin Small.
Diversification Opportunities for HUMANA and Franklin Small
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUMANA and Franklin is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Franklin Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Cap has no effect on the direction of HUMANA i.e., HUMANA and Franklin Small go up and down completely randomly.
Pair Corralation between HUMANA and Franklin Small
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the Franklin Small. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 1.94 times less risky than Franklin Small. The bond trades about -0.04 of its potential returns per unit of risk. The Franklin Small Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,270 in Franklin Small Cap on September 12, 2024 and sell it today you would earn a total of 526.00 from holding Franklin Small Cap or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.57% |
| Values | Daily Returns |
HUMANA INC vs. Franklin Small Cap
Performance |
| Timeline |
| HUMANA INC |
| Franklin Small Cap |
HUMANA and Franklin Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and Franklin Small
The main advantage of trading using opposite HUMANA and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Franklin Small 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 Small will offset losses from the drop in Franklin Small's long position.The idea behind HUMANA INC and Franklin Small Cap 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 Small vs. Needham Aggressive Growth | Franklin Small vs. Ultramid Cap Profund Ultramid Cap | Franklin Small vs. HUMANA INC | Franklin Small 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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