Correlation Between CIG PANNONIA and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both CIG PANNONIA and Aflac Incorporated 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 CIG PANNONIA and Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIG PANNONIA LIFE and Aflac Incorporated, you can compare the effects of market volatilities on CIG PANNONIA and Aflac Incorporated 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 CIG PANNONIA with a short position of Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIG PANNONIA and Aflac Incorporated.
Diversification Opportunities for CIG PANNONIA and Aflac Incorporated
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between CIG and Aflac is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CIG PANNONIA LIFE and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated and CIG PANNONIA 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 CIG PANNONIA LIFE are associated (or correlated) with Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of CIG PANNONIA i.e., CIG PANNONIA and Aflac Incorporated go up and down completely randomly.
Pair Corralation between CIG PANNONIA and Aflac Incorporated
Assuming the 90 days trading horizon CIG PANNONIA LIFE is expected to generate 1.33 times more return on investment than Aflac Incorporated. However, CIG PANNONIA is 1.33 times more volatile than Aflac Incorporated. It trades about 0.48 of its potential returns per unit of risk. Aflac Incorporated is currently generating about 0.13 per unit of risk. If you would invest 85.00 in CIG PANNONIA LIFE on October 25, 2024 and sell it today you would earn a total of 11.00 from holding CIG PANNONIA LIFE or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CIG PANNONIA LIFE vs. Aflac Incorporated
Performance |
| Timeline |
| CIG PANNONIA LIFE |
| Aflac Incorporated |
CIG PANNONIA and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIG PANNONIA and Aflac Incorporated
The main advantage of trading using opposite CIG PANNONIA and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIG PANNONIA position performs unexpectedly, Aflac Incorporated 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 Aflac Incorporated will offset losses from the drop in Aflac Incorporated's long position.| CIG PANNONIA vs. Diamyd Medical AB | CIG PANNONIA vs. Meli Hotels International | CIG PANNONIA vs. Park Hotels Resorts | CIG PANNONIA vs. Apollo Medical Holdings |
| Aflac Incorporated vs. The Yokohama Rubber | Aflac Incorporated vs. Tower One Wireless | Aflac Incorporated vs. GOODYEAR T RUBBER | Aflac Incorporated vs. VULCAN MATERIALS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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