Correlation Between American Equity and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both American Equity 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 American Equity and Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Equity Investment and Aflac Incorporated, you can compare the effects of market volatilities on American Equity 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 American Equity with a short position of Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Equity and Aflac Incorporated.
Diversification Opportunities for American Equity and Aflac Incorporated
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Aflac is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding American Equity Investment and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated and American Equity 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 American Equity Investment 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 American Equity i.e., American Equity and Aflac Incorporated go up and down completely randomly.
Pair Corralation between American Equity and Aflac Incorporated
If you would invest 8,096 in Aflac Incorporated on August 26, 2024 and sell it today you would earn a total of 3,143 from holding Aflac Incorporated or generate 38.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
American Equity Investment vs. Aflac Incorporated
Performance |
| Timeline |
| American Equity Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aflac Incorporated |
American Equity and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Equity and Aflac Incorporated
The main advantage of trading using opposite American Equity and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Equity 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.| American Equity vs. MetLife Preferred Stock | American Equity vs. Prudential Public Limited | American Equity vs. MetLife Preferred Stock | American Equity vs. Jackson Financial |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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