Correlation Between Aflac Incorporated and Atlantic American
Can any of the company-specific risk be diversified away by investing in both Aflac Incorporated and Atlantic American 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 Incorporated and Atlantic American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aflac Incorporated and Atlantic American, you can compare the effects of market volatilities on Aflac Incorporated and Atlantic American 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 Incorporated with a short position of Atlantic American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aflac Incorporated and Atlantic American.
Diversification Opportunities for Aflac Incorporated and Atlantic American
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aflac and Atlantic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aflac Incorporated and Atlantic American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic American and Aflac Incorporated 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 Incorporated are associated (or correlated) with Atlantic American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic American has no effect on the direction of Aflac Incorporated i.e., Aflac Incorporated and Atlantic American go up and down completely randomly.
Pair Corralation between Aflac Incorporated and Atlantic American
Considering the 90-day investment horizon Aflac Incorporated is expected to generate 0.38 times more return on investment than Atlantic American. However, Aflac Incorporated is 2.62 times less risky than Atlantic American. It trades about 0.09 of its potential returns per unit of risk. Atlantic American is currently generating about -0.02 per unit of risk. If you would invest 6,774 in Aflac Incorporated on September 2, 2024 and sell it today you would earn a total of 4,626 from holding Aflac Incorporated or generate 68.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aflac Incorporated vs. Atlantic American
Performance |
| Timeline |
| Aflac Incorporated |
| Atlantic American |
Aflac Incorporated and Atlantic American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aflac Incorporated and Atlantic American
The main advantage of trading using opposite Aflac Incorporated and Atlantic American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aflac Incorporated position performs unexpectedly, Atlantic American 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 Atlantic American will offset losses from the drop in Atlantic American's long position.| Aflac Incorporated vs. Prudential Financial | Aflac Incorporated vs. Lincoln National | Aflac Incorporated vs. Brighthouse Financial | Aflac Incorporated vs. Unum Group |
| Atlantic American vs. CNO Financial Group | Atlantic American vs. MetLife Preferred Stock | Atlantic American vs. FG Annuities Life | Atlantic American vs. Prudential Public Limited |
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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