Correlation Between AFLAC and Surgical Science
Can any of the company-specific risk be diversified away by investing in both AFLAC and Surgical Science 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 AFLAC and Surgical Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFLAC Inc and Surgical Science Sweden, you can compare the effects of market volatilities on AFLAC and Surgical Science 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 AFLAC with a short position of Surgical Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFLAC and Surgical Science.
Diversification Opportunities for AFLAC and Surgical Science
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between AFLAC and Surgical is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AFLAC Inc and Surgical Science Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgical Science Sweden and AFLAC 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 AFLAC Inc are associated (or correlated) with Surgical Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgical Science Sweden has no effect on the direction of AFLAC i.e., AFLAC and Surgical Science go up and down completely randomly.
Pair Corralation between AFLAC and Surgical Science
Assuming the 90 days trading horizon AFLAC Inc is expected to under-perform the Surgical Science. But the stock apears to be less risky and, when comparing its historical volatility, AFLAC Inc is 2.59 times less risky than Surgical Science. The stock trades about -0.16 of its potential returns per unit of risk. The Surgical Science Sweden is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 11,700 in Surgical Science Sweden on September 13, 2024 and sell it today you would earn a total of 3,050 from holding Surgical Science Sweden or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
AFLAC Inc vs. Surgical Science Sweden
Performance |
| Timeline |
| AFLAC Inc |
| Surgical Science Sweden |
AFLAC and Surgical Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFLAC and Surgical Science
The main advantage of trading using opposite AFLAC and Surgical Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFLAC position performs unexpectedly, Surgical Science 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 Surgical Science will offset losses from the drop in Surgical Science's long position.| AFLAC vs. Liberty Media Corp | AFLAC vs. Check Point Software | AFLAC vs. MediaZest plc | AFLAC vs. Centaur Media |
| Surgical Science vs. Verizon Communications | Surgical Science vs. The Mercantile Investment | Surgical Science vs. Sabre Insurance Group | Surgical Science vs. Charter Communications Cl |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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