Correlation Between Lord Abbett and HUMANA
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By analyzing existing cross correlation between Lord Abbett Convertible and HUMANA INC, you can compare the effects of market volatilities on Lord Abbett and HUMANA 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 Lord Abbett with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and HUMANA.
Diversification Opportunities for Lord Abbett and HUMANA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and HUMANA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Lord Abbett 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 Lord Abbett Convertible are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Lord Abbett i.e., Lord Abbett and HUMANA go up and down completely randomly.
Pair Corralation between Lord Abbett and HUMANA
Assuming the 90 days horizon Lord Abbett is expected to generate 2.75 times less return on investment than HUMANA. But when comparing it to its historical volatility, Lord Abbett Convertible is 2.77 times less risky than HUMANA. It trades about 0.01 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,930 in HUMANA INC on February 28, 2024 and sell it today you would earn a total of 28.00 from holding HUMANA INC or generate 0.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.56% |
Values | Daily Returns |
Lord Abbett Convertible vs. HUMANA INC
Performance |
Timeline |
Lord Abbett Convertible |
HUMANA INC |
Lord Abbett and HUMANA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lord Abbett and HUMANA
The main advantage of trading using opposite Lord Abbett and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.Lord Abbett vs. Virtus Convertible | Lord Abbett vs. HUMANA INC | Lord Abbett vs. Aquagold International | Lord Abbett vs. Barloworld Ltd ADR |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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