Correlation Between Abacus Life and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both Abacus Life and Genworth Financial 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 Abacus Life and Genworth Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abacus Life and Genworth Financial, you can compare the effects of market volatilities on Abacus Life and Genworth Financial 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 Abacus Life with a short position of Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life and Genworth Financial.
Diversification Opportunities for Abacus Life and Genworth Financial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Abacus and Genworth is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial and Abacus Life 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 Abacus Life are associated (or correlated) with Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of Abacus Life i.e., Abacus Life and Genworth Financial go up and down completely randomly.
Pair Corralation between Abacus Life and Genworth Financial
Considering the 90-day investment horizon Abacus Life is expected to under-perform the Genworth Financial. In addition to that, Abacus Life is 1.8 times more volatile than Genworth Financial. It trades about -0.05 of its total potential returns per unit of risk. Genworth Financial is currently generating about 0.28 per unit of volatility. If you would invest 682.00 in Genworth Financial on August 30, 2024 and sell it today you would earn a total of 97.00 from holding Genworth Financial or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abacus Life vs. Genworth Financial
Performance |
| Timeline |
| Abacus Life |
| Genworth Financial |
Abacus Life and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abacus Life and Genworth Financial
The main advantage of trading using opposite Abacus Life and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abacus Life position performs unexpectedly, Genworth Financial 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 Genworth Financial will offset losses from the drop in Genworth Financial's long position.| Abacus Life vs. FG Annuities Life | Abacus Life vs. Globe Life | Abacus Life vs. MetLife Preferred Stock | Abacus Life vs. MetLife Preferred Stock |
| Genworth Financial vs. MetLife Preferred Stock | Genworth Financial vs. Prudential Public Limited | Genworth Financial vs. Primerica | Genworth Financial vs. CNO Financial 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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