Correlation Between Atlantic American and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both Atlantic American 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 Atlantic American and Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic American and Aflac Incorporated, you can compare the effects of market volatilities on Atlantic American 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 Atlantic American with a short position of Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic American and Aflac Incorporated.
Diversification Opportunities for Atlantic American and Aflac Incorporated
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atlantic and Aflac is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic American and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated and Atlantic American 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 Atlantic American 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 Atlantic American i.e., Atlantic American and Aflac Incorporated go up and down completely randomly.
Pair Corralation between Atlantic American and Aflac Incorporated
Given the investment horizon of 90 days Atlantic American is expected to under-perform the Aflac Incorporated. In addition to that, Atlantic American is 2.94 times more volatile than Aflac Incorporated. It trades about -0.07 of its total potential returns per unit of risk. Aflac Incorporated is currently generating about 0.17 per unit of volatility. If you would invest 7,963 in Aflac Incorporated on September 1, 2024 and sell it today you would earn a total of 3,437 from holding Aflac Incorporated or generate 43.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantic American vs. Aflac Incorporated
Performance |
| Timeline |
| Atlantic American |
| Aflac Incorporated |
Atlantic American and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic American and Aflac Incorporated
The main advantage of trading using opposite Atlantic American and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic American 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.| Atlantic American vs. CNO Financial Group | Atlantic American vs. MetLife Preferred Stock | Atlantic American vs. FG Annuities Life | Atlantic American vs. Prudential Public Limited |
| Aflac Incorporated vs. Prudential Financial | Aflac Incorporated vs. Lincoln National | Aflac Incorporated vs. Brighthouse Financial | Aflac Incorporated vs. Unum Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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