Correlation Between HUMANA and Franklin Liberty
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By analyzing existing cross correlation between HUMANA INC and Franklin Liberty Investment, you can compare the effects of market volatilities on HUMANA and Franklin Liberty 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 Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Franklin Liberty.
Diversification Opportunities for HUMANA and Franklin Liberty
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HUMANA and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Franklin Liberty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Inv 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 Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Inv has no effect on the direction of HUMANA i.e., HUMANA and Franklin Liberty go up and down completely randomly.
Pair Corralation between HUMANA and Franklin Liberty
Assuming the 90 days trading horizon HUMANA INC is expected to generate 4.29 times more return on investment than Franklin Liberty. However, HUMANA is 4.29 times more volatile than Franklin Liberty Investment. It trades about 0.06 of its potential returns per unit of risk. Franklin Liberty Investment is currently generating about -0.08 per unit of risk. If you would invest 7,939 in HUMANA INC on February 3, 2024 and sell it today you would earn a total of 157.00 from holding HUMANA INC or generate 1.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 90.91% |
Values | Daily Returns |
HUMANA INC vs. Franklin Liberty Investment
Performance |
Timeline |
HUMANA INC |
Franklin Liberty Inv |
HUMANA and Franklin Liberty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HUMANA and Franklin Liberty
The main advantage of trading using opposite HUMANA and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.The idea behind HUMANA INC and Franklin Liberty Investment 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 Liberty vs. SPDR Barclays Short | Franklin Liberty vs. SPDR Bloomberg Emerging | Franklin Liberty vs. SPDR Barclays Long | Franklin Liberty vs. SPDR Barclays Short |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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