Correlation Between Aflac Incorporated and Globe Life
Can any of the company-specific risk be diversified away by investing in both Aflac Incorporated and Globe Life 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 Globe Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aflac Incorporated and Globe Life, you can compare the effects of market volatilities on Aflac Incorporated and Globe Life 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 Globe Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aflac Incorporated and Globe Life.
Diversification Opportunities for Aflac Incorporated and Globe Life
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aflac and Globe is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aflac Incorporated and Globe Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Life 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 Globe Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Life has no effect on the direction of Aflac Incorporated i.e., Aflac Incorporated and Globe Life go up and down completely randomly.
Pair Corralation between Aflac Incorporated and Globe Life
Considering the 90-day investment horizon Aflac Incorporated is expected to generate 1.53 times less return on investment than Globe Life. But when comparing it to its historical volatility, Aflac Incorporated is 1.13 times less risky than Globe Life. It trades about 0.12 of its potential returns per unit of risk. Globe Life is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 10,548 in Globe Life on August 27, 2024 and sell it today you would earn a total of 590.00 from holding Globe Life or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aflac Incorporated vs. Globe Life
Performance |
| Timeline |
| Aflac Incorporated |
| Globe Life |
Aflac Incorporated and Globe Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aflac Incorporated and Globe Life
The main advantage of trading using opposite Aflac Incorporated and Globe Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aflac Incorporated position performs unexpectedly, Globe Life 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 Globe Life will offset losses from the drop in Globe Life's long position.| Aflac Incorporated vs. Morningstar Unconstrained Allocation | Aflac Incorporated vs. Via Renewables | Aflac Incorporated vs. Sitka Gold Corp | Aflac Incorporated vs. MSCI ACWI exAUCONSUMER |
| Globe Life vs. Prudential Public Limited | Globe Life vs. CNO Financial Group | Globe Life vs. MetLife Preferred Stock | Globe Life vs. MetLife |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |