Correlation Between Lion Group and HUMANA

Can any of the company-specific risk be diversified away by investing in both Lion Group and HUMANA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lion Group and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lion Group Holding and HUMANA INC, you can compare the effects of market volatilities on Lion Group 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 Lion Group with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Group and HUMANA.

Diversification Opportunities for Lion Group and HUMANA

-0.65

Correlation Coefficient

Lion Group  HUMANA

Excellent diversification

The 3 months correlation between Lion and HUMANA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lion Group Holding and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Lion Group 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 Lion Group Holding 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 Lion Group i.e., Lion Group and HUMANA go up and down completely randomly.

Pair Corralation between Lion Group and HUMANA

Given the investment horizon of 90 days Lion Group Holding is expected to under-perform the HUMANA. In addition to that, Lion Group is 10.39 times more volatile than HUMANA INC. It trades about -0.16 of its total potential returns per unit of risk. HUMANA INC is currently generating about 0.06 per unit of volatility. If you would invest  7,982  in HUMANA INC on December 31, 2024 and sell it today you would earn a total of  215.00  from holding HUMANA INC or generate 2.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Lion Group Holding  vs.  HUMANA INC

Lion Group Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

HUMANA INC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lion Group and HUMANA

The main advantage of trading using opposite Lion Group and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Group 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.

The idea behind Lion Group Holding and HUMANA INC 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.